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You are here: Home Housing Renting Should I buy or rent?

Renting

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01/06/2007Should I buy or rent?

Should I buy or rent? Finding a place to live is the first need for any expat arriving in a new country, and for those with the means that raises the first major economic issue.

A question that occurs to the shrewd expat when moving to a host country for a term of maybe three, perhaps four years or more is: 'Should I rent or should I buy?'

The answer depends obviously on the expectations of price rises in the market.

Had you gone to Dublin eight years ago and bought a well-located city property, you would be walking away now with enough profit to more than keep you in Guinness.

Berlin holds out some tantalising signs of hope for those who like to play on the great roulette wheel of real estate.

Prices have risen, in some areas sharply, particularly in the old East where a flood tide of gentrification has swept in.

At the same time the new capital is lagging well behind other German cities in property prices, holding out the prospect of more rises to come.

So rent or buy, where does the balance lie in Berlin today?

Gerald Beuker, of the Berlin real estate firm, Angerman, expresses the optimism about property prices that is a professional requirement for someone in his line of work.

"There is a saying that Berlin will be filled from the middle - and in the centre of Berlin there is good demand. "In the top locations you can get 4-6,000 euros per square metre," he says.

But on the market overall, Herr Beuker is more cautious.

"It's not really a boom market. The market is OK, but it's not rising, rising - and of course we have a very low level of price."

Mr Beuker says you can expect to pay about 1,500 euros per square metre for accommodation in the middle range of the Berlin market. That, he says is one or two thousand less that you could expect for the equivalent level in cities like Hamburg and Munich.

As a man who deals in both the rental and sales markets Mr Beuker can take a disinterested view of the pros and cons of both.

So rent or buy? "For three or four years I will say rent, because buying there is the risk later that at the end of your term you will not get the price you need.

"Maybe if you buy at the top in Gruunewald or Dahlem, you maybe will have a chance to see the price rise enough," Mr Beuker says.

But he adds another warning that the continuing shakeout of German property holdings since reunification will see more properties formerly held by the State coming into private hands, putting more units and houses on the market and more downward pressure on prices.

In all the advice is that, unless you are here for the very long term, renting is the best bet.


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