Dienstag, 22. Mai 2007

German Investor Sentiment rises in May

Sentiment among German investors about the outlook for Europe's largest economy improved in May, the latest survey by the ZEW economic research institute showed today.

The think tank said its economic sentiment indicator, based on a survey of 301 analysts and institutional investors, rose to 24.0 this month from 16.5 in April.

'The economic upswing in Germany seems to be hardly influenced by the VAT increase and the economic downturn in the US,' ZEW President Wolfgang Franz said in a statement, referring to a three-point VAT rise earlier this year.

'Increasing employment rates in all economic sectors and a good investment climate put the upswing on a sustainable growth path,' he added.

A separate gauge of current conditions for Germany advanced to 88 from 76.9 in April. The consensus forecast was for a reading of 79.

A measure of expectations for the euro region rose to 22.3 in May from 10.7 the previous month, the ZEW said.

Story from RTÉ Business : http://www.rte.ie/business/2007/0522/Germany.html

links: Centre for European Economic Research

Dienstag, 15. Mai 2007

Germany shows strong growth - Eurozone beats forecasts

The eurozone saw solid growth in the first three months of 2007, beating expectations, official figures show.

The 13-country area's economy grew 3.1% year-on-year - below the 3.3% growth seen in the previous quarter, but beating the 2.9% forecast.

The data fuels analysts' view that the area's interest rates are set to rise.

Last week, the European Central Bank (ECB) kept rates at 3.75%, but the bank's head called for "strong vigilance" to counter price risks.

The expression by Jean-Claude Trichet is viewed as a way of implying that the benchmark rate will be lifted to 4% at the ECB's next meeting in June.

"Stronger-than-expected eurozone GDP growth should help provide the extra leverage to the ECB for higher rates in the next few months," said David Brown of Bear Stearns.

While annual growth was 3.1%, growth on a quarter-by-quarter basis hit 0.6%, beating the 0.5% forecast.

"Today's GDP [gross domestic product] report strengthens our belief that the eurozone economy is on a sustained growth trajectory," said Martin van Vliet, an economist at ING.
Less damage

A major factor behind the growth was strength in Germany -
the region's largest economy.

Separate data from Germany's government showed that national growth for the quarter - while less than the previous period - beat expectations, hitting 0.5%.

Although German consumer spending was dented by higher value-added tax (VAT), which rose from 16% to 19% in January, this was countered by strong investment.

Economists greeted the German figures - which showed a 3.3% rise year-on-year - positively.
Bear Stearns' David Brown said: "With the impact of Germany's VAT hike causing less damage to German growth in the first quarter, it has helped solidify euro zone growth... over the last 12 months."

Sebastian Wanke of Dekabank said: "Although the basic story of private consumption and trade as brakes on growth... appears to be valid, it is happening at a higher level than expected."
Eurozone forecasts

Meanwhile, official data from France showed its economy grew by 0.5% in the quarter - the same as the previous three-month period.

Overall, the 27-member European Union saw growth reach 3.2% year-on-year, exceeding the 2.1% seen in the US for the same period.

Separately, the European Commission forecast strong growth over the next six months in the eurozone, before slowing in the final quarter.

Donnerstag, 3. Mai 2007

Berlin Property: An Investment Market

It is a fact that Berlin in Germany has undervalued real estate and with shrewd multi national companies already investing in the city its only a matter of time that others will follow. It is now time for the smaller overseas property investor to examine Berlin's housing market. Research reveals compelling evidence that Berlins housing market is the next big thing in European city investment.

Berlin real estate offers overseas property investors a great opportunity to benefit from low prices with great potential for capital gains. Berlin's property prices are still low and represent the lowest prices in any European City. Recently Prudential Real Estate Investors announced that it had acquired the famous Ewerk office situated in the heart of Berlin. The Ewerk, a former transformer station built in 1928, was renovated during 2004 and 2005.

So why is Berlins housing market full of cheap property? A little research into Berlins City history reveals why Berlins property prices dropped and never caught up with other European cities.

The opening of the Berlin Wall (1989) and the reunification of Germany (1990) resulted in a wave of optimism. The expectations for Europe's largest economy and it's newly created capital city Berlin were high. The pent-up demand particularly from the East Berliners was immense. The conclusion at the time was that the city required a massive investment and construction programme in all sectors.

The Berlin construction boom of the early nineties coincided with both the reduction in residents and more importantly their purchasing power. This coincided with an increase in unemployment levels. The net result was a fall in the price of property and rental values. Berlin witnessed an increase in the availability of office and residential space without an appropriate increase in demand.

Between 1994 and 2004 new property prices fell in Berlin by 30% and rents by 15%.The disposal of large property portfolios by public authorities further undermined price levels.

Property prices in most European countries significantly increased while those in Berlin stagnated or fell. Berlin now represents the most competitively priced property in Europe.
The people of Berlin like to rent property with only 12% of Berliners owning their properties compared with over 20% in Hanover, Hamburg, Munich and Stuttgart. This lack of demand has kept prices low and provides buyers with ample supply of Berlin tenants.

Tourism has increased by 16% in 2004 alone. In excess of 2,000 four and five star hotel rooms have been built in the last 3 years including Ritz-Carlton and Radisson. There were 14 million overnight stays in 2005 compared to 11.2 million in 2003. British tourism increased by 22% in 2006 alone.

The indications are that Berlin is set to boom and the time appears to be now for overseas property investors to head for Berlin.

Nicholas Marr is the CEO behind overseas property website at http://www.homesgofast.com .
His position means that he is contact with hundreds of real estate agents and developers world wide.
This has enabled him to gain a unique insight into international real estate markets from those who work in them at first hand.http://www.homesgofast.com/home/Germany/