• Germany has the most affordable housing in the western world
• Changing market dynamics are likely to drive up home-ownership from its current rate of 43% (lowest of any industrialised nation) and so capital values
• Net yields are amongst the highest in Europe
• An increasing demand for quality housing due to a rising population, growing living space requirements and a lack of investment is likely to drive capital growth
• Many commentators predict the corner is being turned in the wider German economy, driving an improvement in consumer and business confidence
• Over €25 billion invested in German property by private equity funds in the last few years.
• Secure legal infrastructure of Europe’s largest economy

Berlin is the third biggest tourist city in Europe, the government centre of Germany and educational centre of Germany. Berlin is the most significant cultural centre east of Paris and is the capital of Europe's biggest economy. In the economic arena Berlin is finding its place in the industry-dominated German economy as a new service and technology centre.

Investment has been poured into Berlin over the last decade to ensure it is at the forefront of Germany’s economy. Over the last seven years alone the Berlin government has invested €75 billion in the city and its transport infrastructure.

Germany remains the world's largest exporter and is ranked as the 5th most competitive economy in the world- above the UK, Canada and Japan (source: Deloitte).

Unlike almost every other industrialised country Germany has had a stagnant and falling residential property market for the last decade. It is now apparent that prices have stabilised. With noticeable price appreciation in wholesale apartment blocks over the last few years, there is evidence that the corner has been turned.

Why the timing is right

Alongside city budget pressures there is a growing appreciation that real market forces need to be introduced to drive investment and development in residential property. As a result the Berlin government and other institutional owners of large property portfolios have started selling them off to private equity funds.

This change is the start of a fundamental shift from state-owned and subsidised housing to a private market. In the same way Italy, France and Spain have evolved over the last decade from a rental market to a predominately owner-occupier market, all the dynamics are in place for a similar shift in Germany.

There is no avoiding the fact that Germany has had an economically turbulent period over the last five years. The high cost of re-unification and high labour costs depressed the economy and consumer confidence has suffered. The evidence demonstrates that the corner is now being turned. Recent changes to employer's taxes have improved labour competitiveness; there is a new government and a climate that is demanding reform. In 2006 the stock market DAX index rose 24%, economic growth was 1.5% in 2004 up from, -0.5% in 2003.