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Investment news germany

Investment News Germany September 2016

Investment News Germany September 2016

One huge German market is about to be hit by a perfect storm of zero-interest rates and low inflation

While low inflation can pose a problem for many sectors, it is helping to reinvigorate Germany’s housing market, Sean Darby and his team at Jefferies said in a note to clients on Wednesday (emphasis added):

A combination of firm wage growth, negative bund yields, dormant inflation and a booming current account surplus is allowing the German real estate market to reflate. In comparison to Western markets, the German property market starts from a much lower base and also relatively favourable price comparison. We are bullish on the real estate sector as well as the DAX.”  To read more click HERE

GERMANY REMAINS THE DRIVER OF EUROZONE GROWTH

Germany, the Eurozone’s largest economy, grew 0.4 per cent, compared with an impressive 0.7 per cent growth rate during the first three months of the year, albeit that was a better result than expected. Growth was supported by net trade as well as private and government consumption, according to Destatis, the German statistics office. The second-quarter expansion took year-on-year growth to 1.8 per cent on a seasonally adjusted basis. The unemployment rate stands at 4.2 per cent, the lowest level since reunification in 1990 and one of the lowest rates in the European Union. The labour market has now little slack and is set to tighten even further as the baby-boom generation retires.

Strong Domestic Growth Keeps Germany’s Economic Outlook Upbeat

There have been some notable external risks mentioned in the economy because the British vote to leave the EU may still have some ripple effects. Some uncertainties exist because there may be some downsides that may not be experienced immediately but will only be realized when it is too late. The German finance ministry mentioned that there have has been slower economic growth than had been expected in the three months ended in June. To read more click HERE

Further Investment News Germany. Dolphin Trust Project Update: Windorferstraße, Leipzig
As Dolphin Trust goes from strength to strength as an investment, we can provide details on one of the projects our clients have invested in. The city of Leipzig is also known by the Leipziger Messe, which is one of the oldest trade fair venues in the world and its tradition dates back to the year 1165. The most famous one is the annual “Leipzig Book Fair”. With a settlement of international renowned companies such as Porsche AG and the BMW Group, Leipzig is an attractive business location as well. The existing infrastructure with efficient transport routes such as the airport in Leipzig / Halle, modern offices, commercial and residential buildings suggests that Leipzig as a great city for economic growth.

The building is located in Kleinzschocher area and was built in the second half of the 19th century. It was the residential and commercial building of cigar manufacturer Gustav Boehme and was one of the first new buildings in the street. Dolphin Capital redeveloped the listed building from 2015-2016. Extensive work at the façade as well as at the historical stairwell were made to complement the modern furnishings of the refurbished apartments.  See this project in more detail HERE

The Dolphin Trust investment opportunity can be found here http://www.barringtonhowe.com/product/dolphin-trust-gmbh/

 

 

5 investment mistakes to avoid

Of the mistakes made by investors, several of them are repeat offenses. The same mistakes being made over and over. After a few alarming prospective client calls recently, it reinforced our opinion that these types of mistakes need to be eradicated by investors.

1 Not listening
Now be honest investors. Have you ever had someone explain something to you but you have already switched off. You’re not listening for whatever reason? Investors are looking for the best investment opportunities but if you don’t listen to the explanation then how can you know from just a headline? Experience has taught me that sometimes you gain more from listening than you do from speaking.

2 Unreasonable expectations
Looking for the highest rate of return as the main reason for investing is maybe not the best starting point. What is your reason for selecting an investment after all? Understanding the structure or business model? Looking at what conditions could affect the investment? Prefer something offering a lower risk or a form of security in the event that something could go wrong to give you more comfort? Having a reasonable outlook may help you when looking for something that suits you. This leads me to point 3!

3 Understanding your own profile
Do you know how much you can afford to invest? Are you a speculative investor or do you prefer a low risk investment? Understanding yourself is a good point to start when you plan to invest. If you know what you are looking for it’s harder for someone to sway you in a different direction. A very wise man always said if you don’t know what you’re doing then why are you doing it? Invest in yourself first as it’s the most important investment decision you could make.

4 Making emotional rather than informed decisions
Knowledge is power someone once told me and I tend to agree with this. I was always taught to learn from people that know more than me. Take their knowledge and feed my own. So if someone understands an investment product, has been trained or has relevant information not on the brochure, it’s more likely to benefit an investor to take in this information so that an informed decision can be made rather than emotional one.

5 Taking responsibility
It’s your investment choice so be responsible. It’s your own capital so before you invest it, make sure you understand what is being presented to you. If you don’t understand then ask the question. Maybe you want to meet up with company. Is a telephone call enough for you? Everyone is different but taking responsibility could eradicate some of the common mistakes in investing. Investors who recognise and eradicate these common mistakes give themselves a greater chance of meeting their investment goals and being profitable and successful. Isn’t that the reason you invest?

Worldwide Investment

What’s new in the world of investment?

The Bank of England is releasing trails of information into the media to suggest an interest rate rise possibly by the end of the year. Experts believe with the Chinese Black Monday, lowering oil prices and the turmoil in the global markets that bank interest rates will not increase until February of 2016. The Chinese stock market nosedived by a whopping 8.5% recently sending investors into panic. Even to the point that the Chinese reduced their bank interest rate in attempt to soften the blow.

Oil prices have hit an all-time low this year on the back of the Chinese market with many employees within the industry being laid off. Economists are predicting that US Federal Reserve will suspend their September interest rate increase and Bank of England’s forecast to be put back after the early 2016 forecast. Analysts have stated that the weakness in emerging markets is now spreading to developed markets. That in turn doesn’t make a base rate increase viable in the US or UK in the coming months ahead.

How has this effected worldwide investment? Whilst the unpredictability of the stock market has kicked in, the fixed rate returns of asset back investments that Barrington Howe specialise in continue to thrive. With the business models strong enough to stand a drop in the market, these secured assets continue to raise millions in private funding giving above average returns in the form of fixed rate bonds and property loan notes. With interest rates still at an all-time low, bank savings are still receiving an extremely low return and have done so for over 5 years. The decision on where is the best place to invest always poses a conundrum. However, fixed rate asset backed alternative investment is still thriving.

 

 

Dolphin Capital GMBH

German Real Estate increases with Euro rate drop

Investor and resident demand continues to increase in the Berlin housing market as reported by the CBRA Berlin Housing Market Report. The main reasons for this are improved economic performance and purchasing power in addition to growth in both population and numbers of households. Investors’ extreme interest in residential property is based on prices, which are still moderate by international comparison, the positive opportunities for the city, low interest rates, and the shortage of alternative investments.

Due to the noticeable decrease of the euro exchange rate, Property in Germany has become even more appealing to investors from other currency areas such as the UK with sterling holding strong. Even with the Euro rate dropping, it’s had a positive impact on German real estate. Berlin is seeing the highest increase in investment at over €1.3 billion in Q1 2015 compared to €617 million in the same period last year. This is great news for our Dolphin Trust formerly Dolphin Capital investors as the Euro was seen by some investors as a big area of concern.

Participants in a recent Berlin Hyp survey established that Germany remains highly appealing for investment in 2015 and that investors have immense confidence in the country’s constant economic development. German real estate is still in demand as an investment opportunity with decent yield prospects and a high percentage (around 84%) of survey participants feel that the real estate market will continue to strengthen and take advantage from conflicts around the world. Furthermore, German consumers’ disposition to buy property improved even more in May. This was encouraged by an all-time low in unemployment and low interest rates.

Barrington Howe celebrates this month a third year anniversary of working with Dolphin Trust. The latest Dolphin Trust (Windorferstrasse 43, Leipzig )project started restoration works on this 19th century three-storey building in April 2015. The demolition work has been completed successfully and the walls and floors are now being put in place, with scaffolding erected around the building. All of the apartments will be appointed with bath tubs and a balcony or terrace.

Another Dolphin Trust project is Heeperstrasse 70, Leopoldshöhe. This building which was previously a furniture factory but Dolphin Trust has plans to refurbish parts which used to serve as store areas. The remaining areas will most likely be demolished and replaced with new buildings. Heeperstrasse is located in a popular university town in Detmold. The increase in demand for housing in Detmold has caused the new build sector to see a rise of more than 9.5% annually for the last four years.

 

 

Luxury London Barrington Howe

Central London property prices set to rise 18% in next five years

Central London property prices set to rise 18% in next five years and rents by 19.5% as market moves forward after the UK’s general election, it is claimed.

The latest analysis says that unprecedented uncertainty surrounding last month’s election saw a stifling of house price growth across London, with the rate of house price growth at less than 4%, compared to the 9.6% increase seen in 2014.

The majority win by the conservatives has eased the fear of mansion taxes and potential capped rents. London is not to bear the brunt of these negative tax changes. However both issues have now subsided, following the surprise majority win by the Conservatives, according to international real estate consultants Cluttons.

Pre election worries saw domestic and international buyers’ confidence reflected in a sharp tailing off in demand during the first quarter of 2015. Behavioral trends saw vendors withdrawing properties and buyers adopting a wait and see approach. However, this is not the case with the exit strategy of our London Property Bond which has sold 3 off plan luxury penthouse apartments in fashionable St Johns Wood. As such it provides an excellent example of a strong niche market breaking the barriers in central London property.

‘There is no doubt that the results of the general election have helped to re-inject confidence into the market that had receded early on this year,’ said Cluttons’ international research and business development manager, Faisal Durrani.

‘The outlook for the London housing market has stabilised, while buyers and vendors have returned to the market following a conspicuous absence of activity. Our outlook for the rest of the year is for increased stability in the market and a return to a more normal state of activity,’ he added.

The report also says that despite the Mortgage Market Review (MMR) contributing to a 16% year on year dip in home purchase loans in greater London to March 2015, affordability appears to be improving slightly, with the average loan size dipping to 3.86 times annual income in the first quarter of 2015.

Cluttons forecasts modest central London house price growth in 2015 of between 2% and 3%, before accelerating to nearly 5% in 2016 and stabilising at around 4% per annum between 2017 and 2019. Cluttons expect this level of growth to deliver cumulative capital value appreciation of almost 18% over the next five years.

The prospects for the prime central London rental market are stable, with average growth of 4% per annum forecast for the next five years. ‘The key driver of course for this behaviour is the desire to purchase.

For investors seeking a strong market to invest into, our London Property Bond represents a sensible option with strong forecasts for the years ahead. A 5 year bond with a fixed return of 8% per annum paid every 6 months.