- Low vacancy rates Major German cities continue to experience structurally low vacancy levels due to chronic housing undersupply and strong tenant demand.
- Rising rents Ongoing rental growth, supported by supply constraints, urbanisation, and a large long-term rental population.
- Tax-free capital gains Capital gains can be tax-free after a 10-year holding period, enhancing long-term investment returns.
- Stability of economy and asset class Germany benefits from one of Europe’s largest and most stable economies, with residential property considered a defensive and resilient asset class.
- Interest rates Access to traditionally competitive long-term fixed-rate mortgage products, providing payment certainty and risk mitigation.
- Population / GDP growth Continued population growth in key cities driven by employment opportunities and inward migration, alongside steady GDP performance supporting housing demand.
- Lack of supply Chronic undersupply of housing, with planning constraints and slow build rates continuing to restrict new stock, underpinning long-term price and rental resilience.
- Rental growth Robust and consistent rental increases driven by strong tenant demand and constrained supply.
- Capital appreciation Established history of long-term capital growth, particularly in prime cities, commuter belts, and regeneration-led locations.
- Population / GDP growth Steady population expansion and a diverse, service-led economy supporting employment, inward migration, and continued housing demand.
- Interest rates Improving rate outlook with expectations of gradual easing, enhancing borrowing affordability and supporting market activity.
- High rental yields and robust tourism demand Attractive rental returns driven by strong domestic and international tenant demand, bolstered by a thriving short-term rental and tourism market.
- Capital appreciation Consistent long-term property price growth, particularly in prime urban areas and popular coastal regions.
- Favourable tax regimes and residency options Investor-friendly tax policies including no wealth tax, the Non-Habitual Resident (NHR) regime, and attractive residency schemes, enhancing net returns.
- Interest rates Access to competitive mortgage rates with flexible lending options, supporting leveraged property investment.
- Lack of supply Limited new development in high-demand areas, sustaining upward pressure on prices and rents.
- Population / GDP growth Positive demographic trends and steady GDP expansion supporting housing demand, tourism, and long-term market stability.
