2015 sets new record for buy-to-let property investments

Press release | Hamburg

Tenant-occupied multi-family homes changed hands for €1.21bn in 2015 according to the latest report by the Hamburg Municipal Real Estate Evaluation Committee. Commenting on the significance of this figure Axel Steinbrinker, Grossmann & Berger managing director for investment, says, “It’s the highest volume of buy-to-let transactions ever recorded in Hamburg”. Year on year, the volume of transactions rose by about 52%.

2015 sets new record for buy-to-let property investments2015 sets new record for buy-to-let property investments
Appreciable increases in all market parameters
Compared with the prior year all the other market parameters also showed appreciable increases. The number of sales rose by some 16% to 427, the average earnings multiple rose by about 5% to 20.3 times the annual net rent excluding service charges. “Rather like the situation in 2013, considerably more tenant-occupied multi-family houses were sold in 2015 in preferred locations such as Blankenese, Harvestehude and Rotherbaum. This has caused a significant rise in average property prices and average square-metre prices of thirty and about twenty per cent respectively,” adds Steinbrinker. The average price per property was €2.84m, the average price per square metre was about €2,500/m² of living space.

Brisker market despite rental caps
“Contrary to what was expected, the cap on rental increases that came into force in mid 2015 and the new rule that whoever commissions the agent pays the fee has had little effect on the market,” concludes Steinbrinker. “Interest charges remain at historically low rates and have more than compensated for the changes in market rules. Real estate assets currently form part of every investment strategy.” Steinbrinker adds that demand for residential property investments remained high in the 1st half of 2016. Trend for the 2nd half year: no change.

Hamburg market for rental apartment buildings, figures for 2015
2015 2014 Change (%) Trend 2016
Transactions 427 367 +16.3 steady
Volume of transactions (€m) 1,214 800 +51.8 rising
Average price per property (€m) 2.84 2.18 +30.4 rising
Average price per square metre of living space (in €) 2,485 2,101 +18.3 rising
Average earnings multiple 20.3 19.4 +4.6 rising

Source: Gutachterausschuss für Grundstückswerte Hamburg (Municipal Real Estate Evaluation Committee)

Source photo: Grossmann & Berger GmbH

Photo caption: A multi-family building with sitting tenants that was brokered by Grossmann & Berger in Hamburg's Harvestehude district.

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