Italians, Greeks seek shelter in Berlin house market
MILAN (Reuters) - Rutilio de Vito, a 61-year-old pensioner from a hillside town in southern Italy, doesn't speak a single word of German but jumped at the chance to buy a flat in Berlin.
Concerned about the euro zone crisis and suffering the pinch from painful austerity measures at home, de Vito is among many middle-class Europeans, especially from worst-hit Italy and Greece, seeking to shelter at least part of their life savings in property in the capital of the region's strongest economy.
"I feel responsible for my two children and I thought I had to keep something for them while we are preparing for the worst," said de Vito, a former court clerk who lives in a small town near Avellino and retired four years ago.
"I don't speak a word of German and the flat is 1,700 km away, but we have to get out of our small world and look at wider horizons if we want to survive," he said.
It's a much cheaper alternative to top property spots like London, the domain of wealthier investors.
Italian pensioners, doctors, film directors, architects, young couples and teachers, as well as similar middle class Greek families, are looking around with budgets of up to 150,000 euros (123,000 pounds), more than enough for a two-room apartment, agents in Berlin said.
The property rush has made the fortune of Berlin real estate professionals who speak foreign languages.
"Sales of residential property skyrocketed in the last two months due to fears of a possible default of Italy, new property taxes and threats of a recession," said Federico Racca, a manager at Berlino Immobiliare, a real estate agency in Berlin whose clients are mostly Italians.
"Our customer base has moved significantly closer to small savers," he said.
Racca also works with clients from France, Spain, Russia and the Nordic countries - so far the most active foreign buyers of property in Berlin.
De Vito said his 32-year-old daughter was considering the possibility of moving to Berlin to live and work after she degrees in psychology. She is still undecided. If she decides not to go, de Vito will rent the apartment out.
The strength of German's economy and cheap housing prices were what clinched the deal, he said.
"Germany has that extra gear," he said.
PROPERTY TAXES DAMPEN MARKET AT HOME
Austerity measures in both Italy and Greece have included new property taxes which have depressed their domestic markets. Berlin is seen as safer in the long term, more predictable than financial markets and a viable option for migration for younger southern Europeans attracted by the job prospects and lifestyle.
Immobiliare.it, Italy's No. 2 property announcements portal with about 3 million monthly viewers, said the search of Berlin houses on its website rose 18 percent in the five months to September, when the debt crisis hit Italy hard, compared to the same period a year earlier.
Among the mass-market website's three biggest foreign markets, Berlin searches showed the second biggest rise after London's 22 percent gain and ahead of the 16 percent rise for France's Cote d'Azur.
German brokerage Immogroup, which opened a branch in Athens last year, said that interest in Berlin spiked similarly after Greece's crisis escalated. Greek authorities are in talks with private creditors to reach a deal to avoid an unruly default.
"These are simple Greek families who want to invest their life savings," agent Caliope Scherer said.
Just in the first week of December, Berlino Immobiliare network sold 50 flats, as much as it normally does in one month. In November sales rose 60 percent from a month earlier, it said.
Other Europeans have also recently shown interest, though growth has been at a slower pace than from Italy and Greece.
"Italians, followed by Greeks, have been more sensitive (to the crisis) than other investors. But demand is coming from the whole Europe," said Andrea Barbato, head of Berlin-focused property asset manager BATO GROUP.
His group has managed 130 million euros of real estate investments in Berlin over the last five years for wealthy individuals as well as institutional and small investors.
Favourite boroughs appear to be Friedrichshain-Kreuzberg, Mitte, Pankow and Lichtenberg.
"DEMAND FROM WHOLE EUROPE"
Currently just 14 percent of Berliners own their homes and the overall German home-ownership rate is 43 percent, according to Augsburg, Germany-based real estate firm Patrizia Immobilien.
But now even Germans have become more interested in buying their homes, which is likely to be a main growth driver for the country's housing market in coming years.
And while property prices in Berlin have gone up over the past decade, they are still well below those in other large European cities.
According to Italy real estate research firm Scenari Immobiliari, prices for quality residential property in Berlin ranged between 3,800 and 4,700 euros per square metre in December. This compares to 9,700-16,000 euros for London and 8,000-11,900 euros for Paris.
With Italy's latest 33 billion euro austerity package so far failing to restore market confidence and no end to the crisis in sight, the trend of buying from Italy is likely to continue.
M2square agent Annalisa Fornari said: "What we (are seeing) has no comparisons with the last eight years. There is an entire portion of the market that is moving for the Italians."
Stefano Guala, agent at L&B Immobiliya, a Berlin property agency which started serving Russian clients but was now growing thanks to Italians, concurred.
"Often people bought an apartment without even coming to Berlin and doing everything via email and over the phone. This is what has struck me most," Guala said.
Both m2Square and L&B Immobiliya have more than doubled their staff with Italian-language skills to 10 and six, respectively.
De Vito, who has been enjoying touring Italy in a caravan with his wife since he retired, said he rushed to buy his apartment in the eastern Berlin district of Lichtenberg -- without ever stepping into Germany.
(Additional reporting by Veronica Ek in Berlin and Kathrin Jones in Frankfurt; Editing by Sonya Hepinstall/Jeremy GauntA)
- Tweet this
- Share this
- Digg this
- South Korea recovers first bodies from inside sunken ferry |
- Iran slams U.S. justice verdict on Manhattan skyscraper
- Japan expands army footprint for first time in 40 years, risks angering China
- Mediator heads to east Ukraine, seeking surrenders |
- UPDATE 3-Tennis-Monte Carlo Masters men's singles quarterfinals results