Germany tops list for residential investment

Germany, Denmark and the Netherlands are the most popular countries for residential investment in the coming years, according to research from Capital Value.

Whereas until a few years ago cross-border investment in rented residential property was limited mainly to Germany, investors are increasingly showing interest in other countries. During the past two years there have been major cross-border transactions in Scandinavia, with Denmark being particularly popular. In 2012, international parties invested some €350 min in the country.

Now it seems that interest is growing in Dutch rented housing, the research found. In fact, a considerable number of international property investors currently have concrete plans to invest in the Netherlands, potentially leading to billions in extra investment in the Dutch residential investment market.

House prices have fallen in the past few years and many investors now compare the Netherlands to Germany in the early 2000s. Due to the huge price rises in Germany during the past few years, investors believe that better returns can now be achieved in the Netherlands.

Alexander van der Laan, property advisor at Capital Value in London, said a large number of foreign parties are exploring the Dutch housing market and that there was particular interest in large volumes from €50 mln upwards. 'We are seeing clear differences between Anglo-Saxon parties and investors from Germany. German investors tend to take a long-term view and go for a stable return, whereas Anglo-Saxon investors are particularly interested in large volumes with a high return.’

The study, which was presented at the Expo Real trade fair in Munich on Monday, is based on a survey of more than 200 international property investors, including investors from the US, Germany, the UK and Switzerland. It is the first time that such a large-scale survey of the European residential market has been carried out.