Germany's real estate market has invited a significant amount of interest in recent months as potential European buyers have begun to consider it a viable alternative option to the UK and France. The country's economy is one of the strongest in Europe and has steadily improved over the last two years, which has served to build investor confidence, and Germany's developers have sought to satisfy demand by creating new luxury developments in cities including Berlin, Frankfurt and Munich.
However, a fourth city is proving to be a popular and intriguing choice for investors seeking out the best and most interesting opportunities. Ronald Fiedler, head of Engel & Völkers' Dresden office, explained, "Munich is too expensive, Hamburg is too expensive, Berlin is getting too expensive, so investors are looking for the next best thing, and that’s Dresden." An apartment in the city costs an average of €2,800 per sq/m, compared to €3,850 in Berlin and €4,200 in Frankfurt, but its market value is already rising; the price of a new-build Dresden apartment has increased by 47% in five years, outpacing the German average of 30% and Berlin's 33%.
Formerly known as the 'Florence of the Elbe', the city was a cultural centre filled with historic buildings and museums until it was almost entirely destroyed during the bombing of Dresden in 1945. Since the reunification of Germany in 1990, much of the Altstadt, or Old Town, has been rebuilt in its former image with baroque domes, towers and cathedrals lining the south bank of the Elbe river. The city has a thriving theatre and arts scene, and is home to numerous famous galleries and museums, including the Gemäldegalerie Alte Meister, which features works from the Old Masters, and the Mathematisch-Physikalischer Salon, which houses historical instruments from the fields of mathematics and science.
The pace of development is proving attractive to intelligent, ambitious young people, who come to take advantage of the fast-growing Technische Universität Dresden, a university for technology. Large companies are choosing to bring their factories to the city, including Volkswagen AG, which builds the Phaeton sedan in a modern glass-fronted factory in downtown Dresden, and Globalfoundries, which manufactures communication chips and processors. More than 1,500 microelectronics companies employ 48,000 people in the city, making it an increasingly attractive place to live and an excellent location for real estate investment.
If you are considering adding a Dresden property to your portfolio, Engel & Völkers is perfectly placed to assist you in finding the right one. You can browse online through our website, or if you are visiting the city, you may wish to visit our Dresden office. Our real estate agents are equipped with expert local knowledge to help you find prospective investments in the city’s most desirable neighbourhoods.