France vs. Germany: Who scores higher in real estate?
As France has just beaten Germany 2-0 at this year’s UEFA’s semi-finals, experts compare the countries’ real estate sectors in terms of prices, home-ownership and new construction. It seems that unlike the French real estate sector, the German market did not suffer from the 2008 economic crisis.
France’s win against Germany during last night’s semi-final of the EURO 2016 football tournament does not match the comparison between these countries’ real estate performance in recent years, the Crédit Foncier finds in a new study.
The report lays out the structural characteristics of France and Germany’s property markets, revealing substantive differences between the two. It finds that Germany is primarily a market of tenants, with rental real estate in the country benefitting from reasonable prices.
The German government’s dynamic reconstruction policy following the substantial destruction left by WW2 favored an abundant supply of rental housing. This explains low rental costs and the fact that Germany has the lowest percentage of home ownership of all EU countries, with 53% against 65% in France and an average of 70% across the European Union.
After resisting the 2008 economic crisis, the German market has seen prices soar in the past few years, in particular in large cities with a 40% increase between 2009 and 2014 in Berlin and a record-breaking 52% price surge in the Bavarian capital, Munich. Yet, it is still far cheaper to buy property in the German capital than in Paris, where the average price per square meter is almost four times higher (8,000 euros).
The new housing sector in Germany has also remained strong post-crisis, with 300,000 new properties built in 2015, the highest level in 12 years. Between 2009 and 2015 the number of homes built increased by 74%, against only 1% in France.
Nonetheless, the French construction sector has also recorded some notable improvement over the past year, with a net increase in sales of new property to both resident owners and rental investors.
Photo credit: Wikimedia / Compgeo.98