The UK’s referendum decision to leave the EU sent a shockwave across the entire world, which has been illustrated by the mini-crash of the pound since the result was announced.
In terms of the wider fallouts and effects of the UK’s departure, we must continue to wait and see how the UK aligns and positions itself following the impending Brexit. The speed and substance of its new trade agreements with the EU and the rest of the world will ultimately define what impact this decision will have on both the global financial and trade markets, which in turn greatly impacts the international property market.
From my point of view, this is a good moment for Berlin and will further enhance the city’s position as one of Europe’s premier investment destinations. Read any global property investment report from the past two years and Berlin will be near the top of almost every list.
Now is Berlin’s time to shine, with an abundance of rental stock, a booming development pipeline and one of the biggest tech startup sectors in the world.
Berlin is in the same situation that London was post-financial crisis, a stable currency, an undersupply of property and increasing job opportunities (due to cheaper office space) – the perfect mixture for a property boom. Perhaps now Brexit is the final ingredient needed to elevate Berlin’s status to the top level of the property market, as London falters. Ironically the referendum has led to an increased demand from British buyers in Berlin property.
Despite a weakening pound against the euro we’ve seen a sharp increase in British buyers post-Brexit, as parents look to buy apartments for their children that have moved to Berlin, either to take advantage of the booming start-up industry, free public universities or professionals looking for a more enjoyable work-life balance, generally.
One key point to remember is that all markets work in cycles, London has been the big star of the global property market for the past four to five years and remains a key hub for multi-national investors, but the slowdown would have come Brexit or no Brexit.
International investors took advantage of a weak market position for London after the financial crash, with many cashing in on their investments when values inevitably rocketed two to three years later.
If not managed correctly at government level, the same could happen in Berlin in the future. But for now we’re excited to see the city flourish.
In the meantime, London will go back to square one, prices have flatlined and will steadily decrease, whilst investors will take advantage of a weakened currency and pick up properties at a discount, sit on them and wait for the market to re-stabilise.
Brexit could be the best thing that ever happened to the UK – only time will tell. But whilst we’re waiting to find out, Berlin will enjoy its moment in the spotlight.