Posted at 11.02.2021 | | in Aktuelles, Berlin Real Estate Talk, Berliner Immobiliengespräche, News
19th Live Event | Meet the Expert
The Berlin real estate market
from the perspective of prospective buyers from China
For clients from China, the German real estate market has become increasingly attractive in recent years. Most Chinese clients already own numerous properties in China and often also abroad – so buying in Germany is usually not their first foreign investment. An estimated 60-70 per cent of inquirers have a concrete connection to Germany, either their children are studying or living in Germany.
Nancy Yuan, Asia Director at Black Label, is the perfect contact person. In this real estate talk, she explains the search profiles and preferences of Chinese customers and why owners should also offer their property on the international market.
柏林房产的现状和未来 | 第19期柏林房地产对话
Nancy Yuan is Asia Director at Black Label Real Estate. After graduating from Edinburgh University in 2003, she worked for a large Chinese media group in Shanghai for more than 7 years, focusing on international relations. She has been living in Germany since 2012 and shortly after started advising Chinese companies and private clients in Germany. Since 2015, she has been looking after all Asian clients at Black Label Properties.
How Chinese people view the changes on the Berlin Real Estate market?
There are two kind of Chinese people who are buying properties in Germany or in Berlin. Let’s say one one big part is for self-use because a lot of people who are living overseas in China come here to study and for work and they prefer to have their own apartment. The second part are the Chinese who buy properties for investment. This group is also growing because Berlin is the new focus in Europe and it’s a growing center for investments for the Chinese. Berlin is the top choice for the Chinese to invest in properties in Europe so this part is also continually very strong. Even with the rent freeze the Chinese see the new properties like the new build apartments as very good investment targets. Also, they still think Berlin is growing so the demand is still very high but because of the coronavirus it’s of course difficult for clients to come here in person. But all in all, as I said the demand is still growing and we still have a very good feeling a positive outlook for this year.
Your work during the pandemic
The demand is still very strong so we keep having a lot of inquiries and then we keep doing viewings with clients who already live in Europe or Germany so of course we also successfully sold a lot of apartments last year and we will keep doing it this year as well. Of course, for the Chinese who cannot come here in person we still show them what’s happening in Berlin and how positive the price development is. They know the economies in Berlin and in Germany are still very strong here so we will keep answering questions about what’s happening here and of course also show the new projects we have to convince them that they keep considering to buy the properties here.
Main reason for Chinese people to buy in Germany
There are two groups. One group is buying the apartment because they want to live there themselves and prefer to buy instead of renting. The move here because of their studies and for work and because there are a lot of universities in Berlin so there is a big number of Chinese students here. The Chinese parents would like them to have a good living quality in Berlin so of course they look for small apartments for the Chinese students for the young students here. Also, I see a growing amount of the Chinese clients who are moving from other German cities to Berlin because of the work or other reasons. So, they’re also looking for apartments to use for themselves, one or two rooms or sometimes they’re also looking for investment at the same time. If they have enough cash or enough money to do this because they also see a good future in Berlin.
How do clients find you as a Chinese agent?
For the Chinese it’s very important to have recommendations from other clients so I have a lot of recommendations from existing clients from the clients who had very great experience with my work. A very important platform we have is Wechat and we also have our Chinese Black Label website and we also have local partners in china with whom we work together such as the German chamber of commerce in Shanghai and this brings us a very good trustworthy partner and brought us clients.
Process of buying properties in Berlin as a person living in China
The legal frame is the same as for the German buyers but for a lot of Chinese they want to check our company background in advance. Also, they ask a lot of questions about how to buy properties in Germany so building up the trust is very important. German buyers would focus more on the properties and care less about who assisted them to buy but for Chinese it’s very important that they understand and that we have this trust between us. They want to find a trustworthy partner who provides the professional services and to answer their questions in their own language. Compared to the German clients it takes a little bit more time but the legal process is the same as for German buyers. Of course, we will check about the financing situation to check if the Chinese buyer has a financing plan or if they already applied for some mortgage in Germany with a bank or some organization. I also assist them to get the financing in Germany so and so at the same time so this is kind of our guarantee to the vendor.
Main advantages of selling to buyers from China
The biggest advantage is that because we take a lot of time to build up the trust they make decisions very quick. Also, as already mentioned the interest in the whole German market is high from the Chinese side so that they continuously buy properties here. Especially when it comes to investment properties we already have a pool of Chinese clients from whom we already checked the financing background so that we can conclude the sale really quick. In Addition, Chinese people make their decision very fast and then they move on with their lives so they don’t come back and renegotiate and renegotiate. They are very straight forward and once they decide they stick to it and you can rely on it.
Achim Amann: I think from my experience working now with you for over five years I have to say one of the biggest advantages for sellers is of course that the Chinese buyers do have more cash because they are used to have a higher deposit. When I’m checking with the German buyers they usually want a 90-100% financing and even more. The Chinese people on the other hand, when they decide to buy property in Germany they usually have a minimum of 20-30% deposit because they already know that it’s harder for them to get a German mortgage. All in all, when we sell to Chinese people the whole transaction is much faster because we already have a higher deposit.
Your forecast for the next years
I think with this lockdown the beginning of 2021 it will be difficult but soon China will enter a Chinese New Year with the year of the ox and we hope it brings more power and richness in the new year. The economy in china at the moment is stable and also doing well because they’re very strict with corona so that in big city in big cities you have only few cases under 10.
For the economy I’m not the expert but so far it is stable and I think it looks very good because there are also Chinese living overseas in North America in Australia and they are also thinking about an investment in Europe. We also have the clients who come to Berlin because of the Brexit and so the British Chinese they’re also thinking of buying properties in Berlin.