Eight Reasons Not to Invest in a Property in Germany

Germany has a very positive image in the World, but that rosy image may be just smart marketing by the Government, and the cosy image we have of owning very good quality German- made products in the past. The property market in Germany since early 1990, has been stagnant. This led to Germany having some of the most affordable real estate in the European Union. A nation were you can own a house for the price of a new car, and live under the illusion, your property is “safe,” compared to countries like Bulgaria. Here are Eight reasons why owning a house in Germany is a high risk:

1. The German population is in decline, Germany has some of the lowest birth rates in the European Union. One Town in Germany, has the lowest birth rate in all the World- negative population growth, means less demand for housing in the future.

2. Germans do not want to own property, most Germans prefer to rent and purchase a property overseas. Germany has one of the lowest home ownerships in the European Union. Ask yourself why Germans do not want to own a property in their own country?

3. German Banks hit by lending to failed American Banks, helping fuelling the property bubble in the USA,- before the market collapsed, were some of the hardest Banks to get a mortgage from. In fact it was rare for a Bank or Mortgage company to consider more than a 50- 60% mortgage on a German property. Why did the Banks shun encouraging home ownership in their own Country?

4. Germany is a litigation state. Germans are the most likely to sue in the European Union. The state encourage this. And many States do not even need evidence to award damages in civil courts. One reason, many Germans say its better to own nothing in there own Country,- its safer.

5. If you work and own property in Germany, and become unemployed. You are not entitled to unemployment benefits. Germany has a ‘means tested’ benefit system, and many property owners once they become unemployed- simply have to sell to survive.

6. Rental laws in Germany make it impossible for property owners to evict tenants, unless its through a Civil Court. Often tenants can leave unpaid utility bills, and not pay the rent passing on the liability to the property owner.

7. Damaging a property in Germany is not considered a criminal act, and neither is trespassing. Many properties get vandalized, and German Law states it is a civil law case- as long as you can prove who damaged the property.

8. Utility and other bills related to the property, are some of the highest in the European Union, compared to average salaries. The use of alternative energy such as solar power is “illegal” unless you get permission from the local authorities or the local electricity company- One reason few Germans use green energy.

Germany may seem an attractive investment for anyone looking for a “cheap” property, but in reality it is one of the riskiest property markets in Europe. One reason, there is an abundance of cheap, property in Germany, even local people refrain from considering purchasing,- often preferring to own a more expensive property outside Germany.