Cheap Housing in Berlin? Not Anymore, Thanks to Chinese Investors

Cheap Housing in Berlin? Not Anymore, Thanks to Chinese Investors
Oct 29, 2015 By eChinacities.com

Editor's Note: Protests in Australia, politicians calling for restrictions in Vancouver. Chinese investors are buying offshore real estate all across the globe, and some are calling it an invasion. The fact is, there are millions of millionaires in China looking for smart ways to either stash or to grow their fortune, and buying up real estate in the United States, the United Kingdom, and now Berlin is a good way to avoid taxes and inflation. However, they are out-buying Berliners. The article reports on the newest target of offshore real estate investment. 

Chinese investment companies already buy up international real estate in the United States, Japan, and cities like Sydney and Vancouver. Now, investors are eyeing a new market- Berlin, and its residents are less than thrilled.

Chinese overseas investments account for more than a fifth of total Chinese investments over the past two years, according a recent report by an American international investment research firm. Chinese are buying up homes and office spaces in major cities. This has led to price increases in real estate throughout Australia, the United States, the United Kingdom and other countries. Local residents around the world have protested the rising prices of real estate in their neighborhoods.

Cheaper than Shanghai
When China’s stock market took a dive in June, investors pulled out, and instead began to buy large amounts of international real estate. Berlin has become an increasingly popular choice for Chinese investors.

In Shanghai, an urban apartment cost 7,000 Euros per square meter. In the best neighborhoods of the city, prices hit 15,000 Euros. This is several times more than an apartment in Berlin. To wealthy Shanghai residents, buying in Berlin is buying cheap. Purchasing real estate in Berlin has become a low cost way for wealthy Shanghai investors to keep their wealth safe from inflation.

High Return on Investment
The current Euro exchange rate is very low, therefore buying property in Europe has become a safe and reliable way for wealthy Chinese to deposit cash, said a real estate agent. As Berlin is the capital of Germany, and one of Europe’s largest cities, Chinese believe that their investments in the city will be secure. Germany also has policies in place that protect property owners, and such polices are attractive to Chinese buyers.

PricewaterhouseCoopers previously stated in a report that Berlin is the best European city for return on investment. After the report, foreign investors began to flock to Berlin, including investors from China.

Chinese investors have made Berlin their next target, and Berlin residents must be psychologically and financially prepared for housing prices to continue to rise.

Trouble for Chinese Investors
Chinese buyers have already swept through Australia, Canada, the United States and Japan with similar results. Over the past seven years, Chinese have invested $40 billion in the global real estate market. Many residents of countries affected are unhappy with the results.

Former Vancouver mayoral candidate Peter Ladner once said publicly that because of soaring housing prices, the city should limit the number of foreigners who could purchase property, especially Chinese. “Vancouver’s housing has priced its average citizens well out of the market,” while “Mainland Chinese immigrants are moving to Metro Vancouver at the rate of 10,000 a year,” said Ladner.

Australians held a public protest in Melbourne this past July over rising housing prices. One Australian commented, “When overseas investors with a lot of money come to Australia, they will buy a house at an auction for a high price. Then Australians are kicked out. The great Australian dream is to own a home. Is the Australian dream only for Asians now?”

There are other issues besides rising prices. Chinese investors run into trouble in other areas in international markets.

In London, a Chinese investment group planned to spend $768 million to revive the Crystal Palace exhibition hall near Hyde Park, but missed the deadlines for signing the necessary documents. The government canceled the project. In Australia, the government forced a Chinese company to resell $31 million worth of recently purchased real estate because of restrictions on foreigners buying property.

Two years ago, developers from Shanghai investment group DongDu International invested $9.4 million to buy the landmark David Stott Building in Detroit. Today, the building remains empty and the company has gone to court with former tenants of the building.

Source: QQ News

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Keywords: China buying Berlin property Chinese Berlin real estate

10 Comments

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Guest2503130

But their guanxi isn't gonna be able to let them bypass Berlin rent caps. Mind you, they're probably not even thinking of renting it out. Damn.

Nov 06, 2015 04:01 Report Abuse

Guest655508

ever looked up the "owner" of a chinese purchase? majority are companies owned by companies owned by nominee directors...

Nov 08, 2015 05:04 Report Abuse

Guest593844

If China is so wonderful, why would the wealthiest be choosing to place their money elsewhere? This article is proof that the CCP will always lose out to the West, Japan, Singapore, etc. Because the rich here want to get out and be free.

Oct 30, 2015 10:13 Report Abuse

Karajorma

Any idiot knows you don't put all your eggs in one basket. While I might not disagree with your conclusion that the rich want to get out of China, the argument you made to get there is pretty weak.

Oct 30, 2015 14:49 Report Abuse

Englteachted

Simple fix, non citizens should not be allowed to purchase property.

Oct 30, 2015 07:18 Report Abuse

Karajorma

Cause you never hear people complaining about how unfair and ridiculous that is in China, right?

Oct 30, 2015 14:47 Report Abuse

RandomGuy

Reciprocity should be the norm, if China doesn't allow Foreigners to buy property freely, then other countries shouldn't allow Chinese to do so, while they allow Koreans of Japanese since Foreigners can buy poperty in their countries.

Nov 02, 2015 07:58 Report Abuse

Karajorma

Or we could just not sink to their level.

Nov 02, 2015 23:29 Report Abuse

Pahionius

Buy a house in Latvia (my home country), for a 250,000 EUR you can buy a luxury apartment in the city center and get a "green card" to all Europe. Contact me if interested )))

Oct 29, 2015 15:48 Report Abuse

Guest655508

the problem is they can not read this. neither in english nor latvian. so they buy it from a chinese re-seller (translator?) for 600k instead. or... if your own chinese is extremely advanced, you could work at a chinese lawfirm on commission basis and do this too. this option exists in beijing predominantly. a bit of a hint though. most buyers are more interested in fake leases and underground loans (in order to procure deposit statements) than in actually ever making a deposit... it's not a big deal on the side of the provider, but your commission does suffer

Nov 08, 2015 05:02 Report Abuse