My opinion
Real estate is always location, location, location. Well, at least that's what most real estate salesperson will tell you. I, on the other hand, look at the running cost, and the cash flow aspect. It doesn't matter where you buy, Berlin, London, NYC, Tokyo, Paris, if you bought a money pit where the expenses overwhelm income, then you are in trouble.
So is Berlin a nice area to invest? I would say depend on each property. While many are claiming Berlin is going up, my concern is on the rent control. The legal restriction on the rent often prevent the investor from getting a decent return. Think of it this, way, ever invest in REIT stocks? REIT often pays handsome dividend. Dividend may only be paid when there's a strong positive cash flow. Now let's look at German properties. Usually I follow the big boy. Goldman Sachs pulling out of Berlin is a sign they see something that's not correct. Fortress, Morgan Stanley are all pulling out (I have links to support this, but don't have privilege to post link, and links from reliable news source, no real estate salespersons). Many are pulling out because they are not getting the return they are expecting. What does that tell you? Yes, the property price is low. However, that also mean the rent is low. Why are the rent low? Based on my experience, it's often the legal restriction. Not only that, if over 70% of German rent and the prices are restricted, this would not create a "buying" frenzy. Had you purchased a money pit, you would be hard to recuperate your investment. Judging from news, I'd not purchase in Berlin.
Google search a bit, you'll notice those who claim Berlin properties are going up are often those in real estate transactions. Now if you can pull the history, you'll see many fund, big investors put money in around 2004-2006, and are now pulling out... ask yourself why? There was anticipation of REIT placement in Germany, anticipation of higher price movement. Now the economy in Germany is finally growing and economic confidence is high, why hasn't the RE price boom as it should? If you can answer these questions, you'll see German properties may not be the best to buy. Of course, if you find a high yield property and plan to hold for a long duration, then that's different. But I would not expect a quick gain.
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