Wealthy Russian investors in Germany: a Tranio study
In 2017, the company Tranio studied the audience of investors from Russia and other countries of the former USSR, buying in Germany profitable real estate worth from 1 million euros. The study was based on the results of a survey of Tranio partners: private agents and representatives of real estate companies operating in the German market.
In Germany, there are no restrictions for foreigners to buy real estate, and this country is called the “center of attraction for key investors” in the “Emerging Trends in Real Estate – Europe 2018” report prepared by PwC in cooperation with the Urban Land Institute.
Germany is one of the priorities of Tranio, and investor interest in this country is growing rapidly. In 2017, we received about 1,600 applications for the purchase of real estate in Germany, which is one and a half times more than in 2016, and 3.3 times more than in 2015.
Investor interest in Germany is growing rapidly.
35 respondents took part in the survey, 20 of whom are themselves from the post-Soviet space, and 15 – local German realtors or natives of other foreign countries. It is noteworthy that the answers of Russian-speaking respondents differed significantly from the answers of those who do not speak Russian. It can be assumed that these two categories of realtors deal with a different audience of investors and adhere to different principles of work. This report presents the findings of Tranio experts, concerning both wealthy Russian-speaking investors and realtors in Germany.
1. Number of investors
More than half of respondents believe that over the past three years in Germany has increased the number of Russian-speaking investors purchasing real estate worth from 1 million euros. True, there is a noticeable difference in the answers between Russian-speaking and non-Russian-speaking realtors:
The number of Russian-speaking investors
The growth in the number of investors is consistent with the results of Tranio polls of previous years. For example, in 2015, 56% of respondents answered that there are few or no Russian-speaking investors in Germany, and in 2016 only 14% thought so.
“In Russia, there is less money,” comments Georgy Kachmazov, managing partner of Tranio, “so the demand for profitable objects abroad generally falls. However, in Germany we see growth, because the remaining investors are more oriented towards this country. In particular, they much more often prefer Germany to London, which before Brexit was the largest investment market in Europe. ”
Many investors are switching to Germany from the UK, whose investment attractiveness declined after Brexit
Russian-speaking realtors report an increase in the number of investors to a greater degree (60% of respondents) than non-Russian-speaking (50%), but among Russian-speaking survey participants there is also a significantly larger proportion of those who observe a decrease in the number of wealthy investors from the former USSR (20%) than among non-Russian .
According to Sofia Bulanova, Tranio’s real estate sales manager in Germany, “for non-Russian speaking realtors, our compatriots are not the main clientele. Perhaps that is why these realtors pay less attention to their dynamics. At the same time, I admit that Russian-speaking agents may recently lose more clients. ”
Russian-speaking investors in Germany are particularly active in Berlin: 63% of respondents consider this city a priority. This is not surprising: in the above-mentioned PwC and ULI report, Berlin was named the most attractive European market for investment and development in 2017–2018. According to Wohnungs-Infobörse, residential real estate in Berlin is about 20% cheaper than the average for the 7 largest cities in Germany.
Property in Germany
In a survey of Russian-speaking realtors in the second place after Berlin, Munich is by a large margin. According to George Kachmazov, “Munich is historically one of the most popular cities for Russian investors. As in Berlin, one of the important factors of attractiveness is a large tourist flow. Many Tranio customers are confident that Munich is the richest, most understandable and pleasant city in Germany, and they want to invest only there. ” In the entire history of Tranio ⅓ real estate transactions in Germany concluded in Berlin and ¼ – in Munich.
In turn, Frankfurt am Main occupies the second line of the ranking in the survey of non-Russian respondents. In the fDi Intelligence “German Cities of the Future 2016/17” report, this city was ranked first in terms of development potential, while Munich remained in second.
Berlin is the most popular German city among Russian-speaking investors.
He is followed by Munich and Frankfurt am Main.
Düsseldorf and the nearby Cologne are less interesting for Russian investors. “These cities themselves are smaller than Berlin, Munich and Frankfurt, and in the surrounding North Rhine-Westphalia region, the economy is not so strong,” notes Anna Kuryanovich, Tranio’s real estate manager in Germany.