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How to beat the Global Credit Crunch? October 2008
Unless you have been living on a different planet, you will be aware that there have been unprecedented events occurring in the world’s financial markets. Every day we have been confronted with ever more depressing stories revolving around a global banking crisis, falling stock markets and desperate attempts by national governments to inject confidence and huge sums of cash into a financial system that is stumbling from one disaster to the next.
It all looks pretty bleak; however, as Warren Buffett (the world’s richest man and perhaps the world’s most respected investor) says, “I simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.” Buffett’s investments have gone some way to calm the global markets and the point he is making here relates to our current dilemma. When everything seems to be racing toward economic meltdown and commentators predict gloom, Buffett sees opportunity.
If your money isn’t safe in a bank then where is a safe place to invest?
If you are looking for a safe, long term investment with low risk and potentially high returns, look no further than the Berlin property market. Don’t take our word for it, investment in the city remains strong, even during the last turbulent month, whilst many respected overseas property specialists including Colin Murphy (founder of Dublin-based property investment company Someplace Else) have pin-pointed Berlin as a “good long-term and low-risk investment”. When people are even worried about bank deposits and interest rates are set to be lowered to the point where savings will be affected, Berlin can offer consistent yields of 5-6% and even as much as 12% whilst the excellent prospects for capital growth are now widely accepted among property specialists through Europe, Russia and America. Some would say that, at the right price, in the right market, where could be a safer place to put your money than bricks and mortar, especially Berlin bricks and mortar.
Look at the facts. In comparison to any major European city Berlin is very good value (on average €1000 - €2000 per m²). Indeed, even within Germany, Munich is 2 or 3 times that price, while Krakow, Warsaw, Bucharest and Budapest are all substantially more expensive. That’s not to mention London, Paris, Barcelona or Rome where prices can reach in excess of €7000 per m². As little as €40,000 will buy you a property in central Berlin with a yield of 5% or more with prospect of doubling your capital in less than 10 years. After 10 years you are also exempt from any capital gains tax too, which is helpful.
So why haven’t investors been piling money into Berlin? Well they have, except it’s the type of investments that often go un-noticed. Goldman Sachs has invested €2.5 billion in Berlin as well as buying a German property company for €4.1 billion. We know investment banks have had a rough ride recently, but Warren Buffett isn’t a careless investor and his €3.6 billion investment in Goldman Sachs in September 2008 is vindication that their strategy is good enough for the world’s richest man.
Lastly, you are not just investing in Berlin, you are investing in Germany. Commentators have noted three crucial points. Firstly, the German economy is not dependant on debt and will therefore not suffer in the way many other countries will. Secondly, German’s are natural savers and will have the resources to weather the next few months. Thirdly, put simply, Germany is Europe’s largest and strongest economy.
In summary, in these uncertain times, long term growth, return on capital and value for money are key for investors and that’s exactly what Berlin property offers.
Please don’t hesitate to contact me, Richard Pollitt, in Berlin regarding a safe investment in Berlin.
Unless you have been living on a different planet, you will be aware that there have been unprecedented events occurring in the world’s financial markets. Every day we have been confronted with ever more depressing stories revolving around a global banking crisis, falling stock markets and desperate attempts by national governments to inject confidence and huge sums of cash into a financial system that is stumbling from one disaster to the next.
It all looks pretty bleak; however, as Warren Buffett (the world’s richest man and perhaps the world’s most respected investor) says, “I simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.” Buffett’s investments have gone some way to calm the global markets and the point he is making here relates to our current dilemma. When everything seems to be racing toward economic meltdown and commentators predict gloom, Buffett sees opportunity.
If your money isn’t safe in a bank then where is a safe place to invest?
If you are looking for a safe, long term investment with low risk and potentially high returns, look no further than the Berlin property market. Don’t take our word for it, investment in the city remains strong, even during the last turbulent month, whilst many respected overseas property specialists including Colin Murphy (founder of Dublin-based property investment company Someplace Else) have pin-pointed Berlin as a “good long-term and low-risk investment”. When people are even worried about bank deposits and interest rates are set to be lowered to the point where savings will be affected, Berlin can offer consistent yields of 5-6% and even as much as 12% whilst the excellent prospects for capital growth are now widely accepted among property specialists through Europe, Russia and America. Some would say that, at the right price, in the right market, where could be a safer place to put your money than bricks and mortar, especially Berlin bricks and mortar.
Look at the facts. In comparison to any major European city Berlin is very good value (on average €1000 - €2000 per m²). Indeed, even within Germany, Munich is 2 or 3 times that price, while Krakow, Warsaw, Bucharest and Budapest are all substantially more expensive. That’s not to mention London, Paris, Barcelona or Rome where prices can reach in excess of €7000 per m². As little as €40,000 will buy you a property in central Berlin with a yield of 5% or more with prospect of doubling your capital in less than 10 years. After 10 years you are also exempt from any capital gains tax too, which is helpful.
So why haven’t investors been piling money into Berlin? Well they have, except it’s the type of investments that often go un-noticed. Goldman Sachs has invested €2.5 billion in Berlin as well as buying a German property company for €4.1 billion. We know investment banks have had a rough ride recently, but Warren Buffett isn’t a careless investor and his €3.6 billion investment in Goldman Sachs in September 2008 is vindication that their strategy is good enough for the world’s richest man.
Lastly, you are not just investing in Berlin, you are investing in Germany. Commentators have noted three crucial points. Firstly, the German economy is not dependant on debt and will therefore not suffer in the way many other countries will. Secondly, German’s are natural savers and will have the resources to weather the next few months. Thirdly, put simply, Germany is Europe’s largest and strongest economy.
In summary, in these uncertain times, long term growth, return on capital and value for money are key for investors and that’s exactly what Berlin property offers.
Please don’t hesitate to contact me, Richard Pollitt, in Berlin regarding a safe investment in Berlin.
