Just after the Great Recession in 2008, housing prices around Europe plummeted from Spain to Iceland.
We saw the effect in our HQ city of Eindhoven, where residential real estate just flatlined, with unsold houses and apartments coming on the rental market at bargain rates.
That market anomaly is long over, replaced by housing shortages in every major European innovation center. Throw in Brexit, with thousands of highly paid executives leaving London for Luxembourg, Frankfurt and Amsterdam, and you have the makings of a housing crisis, especially for us expats.
No country has been hit harder than Germany, particularly Berlin.
Once “poor but sexy,” Berlin has seen property prices rise 20.5 percent in Berlin in one year. The stated goal of Berlin policymakers is to develop 200,000 new apartments by 2020. To meet that goal, one of the biggest trends is the micro-apartment, tiny spaces for singles or couples in the city centers made livable by amenities and IoT.
Just this weekend, German Chancellor Angela Merkel promised her government will facilitate the investment of about 6 billion euros into the housing market. The goal is constructing 1.5 million new apartments and houses into 2021 in a bid to provide housing for middle and lower income people, according to Bloomberg.
From that post:
The surging cost of housing has threatened to tear at Germany’s social fabric. In Berlin, rents have climbed by an average of almost 60 percent since 2009, according to data compiled by Bulwiengesa AG, as construction failed to keep pace with the thousands of people moving to the capital every year.
Berlin has LOTS of company as people flow to opportunity, in our case, highly skilled internationals, including Stockholm and London. Even Eindhoven, which was a bargain back in 2015, is feeling the pressure as the number of internationals skyrocket.
We’re policy/data wonks, so we see a lot of obscure websites that are data rich if you know what you’re looking for.
Global and Banking Finance Review, for example, has a new post with some surprising facts pulled from a study of 59 commercial residential markets in 19 European countries:
• In the 19 countries analyzed by Stockholm-based Catella, a property-investment firm, 32 percent of a total transaction volume of 48.1 billion came from deals in Germany alone, followed by the United Kingdom with a 15-share. Investors can expect the fattest yield in Krakow, oddly, at 7.44 percent, and the lowest yield in Stockholm, at 1.50 percent. Which explains why a lot more stuff is getting built in Poland than in Stockholm.
• The average purchase price for owner-occupied flats is at 4,616 euros per square meter, with Germany reporting the most homes sales.
• The most expensive rental flats by a mile are in London, with average prices of 40.78 euros/m2. Bern is second-highest at 34.10 euros/m2. The average price of the 54 major rental prices in Europe is at 15.21 euros/m2.
We thought it was time for some good news as the market is finally responding to the shortages and rising prices with new units, something that doesn’t happen here nearly often enough. Also, there’s a whole new tech category, PropTech, that’s driving the effort to quickly help developers catch up with housing demand.
Anyway, here’s a sampling of some of the new residential developments coming online. And yes, we noticed there’s a LOT more for the One Percent than for the 99 percent. Which is why we’re starting out with more expensive options, but adding developments for the rest of us in an update.
Frankfurt is the main beneficiary of Brexit, with a number of multinationals including Goldman Sachs relocating there from London. More than 62,500 new inhabitants have moved to the city since 2011. Yet fewer than 20,000 new apartments have been built, according to the data we found.
Yet, on some level, Frankfurt is ahead of most of its rivals.
Central Frankfurt’s (relatively) new Europaviertel (European Quarter)started construction in 2005. Europaviertel is a big deal, with at least 10 developers handling the residential side of the project, which also includes retail (there’s already a shopping center) and offices. The development is touted as having 10,000 residents by the time it’s built out next year.
One of the many interesting proposed Europaviertel projects is EDEN, a vertical garden tower. EDEN will have 263 apartments.
Europaviertel is just one of many, many projects either underway or planned for Mainhattan. The headliner, of course, is Grand Tower, which will be the tallest residential tower in Europe. Prices there start at a relatively reasonable (compared to Berlin) 218,500 euros for 41m2.
But there several other flashy new projects including Axis, Onyx and 160 Park View. If you’re not making Goldman megabucks, you’re probably going to be living someplace outside Frankfurt. We have personal experience, and we can tell you there are a LOT of great options, including Griesheim and Darmstadt.
Since we brought up the micro-apartment, we thought we should include one of the cooler micro-apartment complexes.
Liebniz85 will have 63 apartments and 8 penthouses. Prices start at 133,700 euros … for 19m2, or about 200 square feet. So that’s 7,000 euros per square meter. Ouch. It’s central Berlin … Charlottenburg.
You don’t get a lot of space, but you do get a walk-in shower, parquet flooring, underfloor heating, fitted wardrobes, fitted kitchens and tailored furniture packages. There’s a laundry room and fitness studio … and a concierge!
The project looks like it’s dragged on a bit but is scheduled to open next year.
Jazz City, Roermond
“Where is Roermond?”
Good question. If it’s known at all outside the Netherlands, the small city of Roermond is famous for its giant discount fashion center. But it’s also close to a couple of cities with serious housing issues such as Maastricht, a major college city, and Eindhoven, a booming tech center. Both are about 20 minutes away via the A2. Duisberg, Aachen and Venlo are all fairly close, so if you wanted to live in luxury in a quiet town, then work in those industrial centers, this the ticket. And it’s a pricey ticket.
Jazz City prices start at 419,000 euros for the small unit – 118m2, or about 1,400 square feet – and go to 855k for the 200m2, or 2,200 square feet, units. Looks like the penthouses are gone.
Considering it’s in the middle of Limburg province, the marketing is, ah, interesting, to say the least. The main building is called “Manhattan,” and the various apartment configurations are named after Miles Davis, Duke Ellington, Ella Fitzgerald, Dave Brubeck and Louie Armstrong. Who, we’re thinking, didn’t spend all that much time in Roermond.
But the project makes sense because it has the three most important qualities of great real estate – location, location and location. Designer Outlet Roermond brings in about 4.5 million visitors from the Netherlands as well as from nearby Belgium and Germany. It’s a very central location on the Maasplassen, a network of lakes popular with boaters and outdoors types.
The trailer shows an older couple – obviously not hurting for money – and artist renderings of spaces that are fab. We go to Roermond regularly, so we’ll have updates.
Aspern Seestadt, Vienna
Ah, the only affordable option on our list, and one that actually exists.
Did you know roughly three out of five Vienna residents live in Gemeindebau — public housing provided and managed by city government — as well as other subsidized social housing typically run by nonprofit associations? This includes rich, poor and everyone in between.
We’ve put Vienna on our lists of best cities for expats at least in part because it’s not having the same crushing housing shortages of Stockholm and Berlin. And it’s not having those shortages in part, because on the northeast side of Vienna, the Aspern Seestadt project is redeveloping an abandoned airport. The project has gone from bare dirt in 2008 to more than 6,000 people living in what is now designated as the 22nd District of Vienna … an entirely new district.
Aspern Seestadt is projected to ultimately have 8,500 units, with 20,000 residents by 2028.
Construction is ongoing, and Lakeside Park Quarter will have 750 new privately-financed apartments – many overlooking green space and with views of the man-made lake.
The district is a 25-minute subway ride away from downtown Vienna (with its own new line) and a 28-minute train trip to Bratislava, according to media reports.
Each developer sets prices and handles marketing. As far as we can tell, flats range from 25m2 to 160m2, and there are subsidized rent plans available of up to 10 euros/m. Prices range start at about 3,000 euros/m2.
The official website has a lot of interesting interactive elements that show you Aspern Seestadt’s relationship with Vienna, as well as the physical layout and updates about new companies moving in.
Antwerp Tower, Antwerp
As we reported in April, Antwerp is being transformed – roads to housing to retail and entertainment.
Along the Leien through the center of the city, the goal is to transform the Opera district south of Antwerp’s regal train station and its famous zoo into a residential and cultural center with 24-hour activity.
Major areas of focus are:
• Opera Square
• Franklin Rooseveltplaats
The game-changer for The Opera might end up being the project next door. Before it was gutted last year, Antwerp Tower was a tired 44-year-old office building that was not great to start with. Now, it’s going to be Antwerp’s marquee multi-use complex with 230 luxury apartments, shopping and offices.
We saw this for ourselves, and Antwerp Tower has a choice location. But again, this is in the luxury market, with prices starting above 300,000 euros for a studio. And there are nine times more pre-sale applicants than apartments to sell when the project is finished, scheduled for 2020. You can read more about Antwerp Tower here … or get on the waiting list to buy a unit.
Last month, we were bowled over by ambitious plans for Antwerp. But then we remembered HafenCity, an 8 billion euro project to revive Hamburg’s waterfront. This public-private partnership is an unimaginably large project. Unlike Aspern Seestadt above, which is aimed at the middle class, HafenCity is bringing to Hamburg luxury apartments with Manhattan-style price tags.
Apartments in the Elbphilharmonie, a 26-story mixed-use development that includes a concert hall, range in size from 120 meters2 to 400 meters2, or about 1,300 square feet to 4,300 square feet. When the building opens next year, they’ll cost – are you sitting down? – between 6.5 million euros ($7.2 million) and 11 million euros, or just over $12 million, according to the New York Times. About half have been sold!
The entire HafenCity project, which began in earnest back in 2001, will cover 160 hectares, and developers claim it will increase the size of Hamburg’s city center by 40 percent. About 97 percent of the land is owned by the city of Hamburg, according to the HafenCity website.
Here are some of the numbers for the entire project from the HafenCity website:
• Overall area: 157 ha of former port and industrial land
• Land area: 127 ha
• Expansion of Hamburg City by 40 percent
• 10.5 km dockside promenade / 3.1 km Elbe embankment
• 6,500–7,000 homes (approx. 1,500–2,000 subsidized) for approx. 13,000–14,000 residents
• Building density: 3.7–5.6 floor space index (FSI)
• Residential density: 110/ha (land area)
• Employee density: 354/ha (land area)
• 57 projects completed; 53 projects under construction or planned
• Investment volume: private investment – around 8.5 billion euros; public investment – 2.4 billion euros, mostly financed from special assets fund sales of plots in HafenCity (around 1.5 billion euros).