From the standpoint of investors, German real estate markets were completely unattractive for many years. In fact, they were treated as “no-go areas.”
Prices hardly went up for more than 10 years, even in metropolitan regions. At the same time, annual returns on rental properties were generally below interest rates even on safe government bonds, sometimes falling below 3 percent. In addition, German laws were clearly pro-tenant, at least from the standpoint of investors.
While most European real estate markets experienced a historic boom in the decade before the start of the financial crisis, which eventually led to a bubble, the property market in the continent’s largest economy was downright dreary. Many investors felt that Germany was “fully developed.”