German Property Investment's Untapped Potential

According to Eurostat figures, between 1997 and 2007, Germany was the most popular destination in Europe with tourists from around the world, by a large margin on Spain, Italy and France. If this has continued, and the size of the margin suggests it probably has, then this could mean there is a whole holiday home market in Germany that has yet to be tapped into.

While Spain, Italy and France may be the biggest destinations with Brits and tourists from other European countries, when tourists from around the globe are taken into the analysis it is Germany that reigns supreme.

Eurostat Figures: based on number of tourists staying at least 4 nights -(1000)

	1997	1998	1999	2000	2001	2002	2003	2004	2005	2006	2007
Germany	56,700	62,800	50,700	53,490	55,236	46,665	46,083	44,828	57,955	57,111	44,993
Spain	No Record	No Record	21,658	27,988	17,718	17,700	17,899	11,823	14,656	16,702	16,551
Italy	22,719	21,965	21,508	22,834	23,730	24,199	24,540	24,316	24,471	24,782	No Record
France	29,088	29,011	28,992	28,556	28,573	No Record	29,552	29,829	31,620	31,515	31,610

The four countries above have the biggest tourism figures in the EU throughout the decade, and you can notice the similar trends in rises and falls over the period. But one thing that never changes is that Germany receives the most tourists year-in-year out throughout the decade.

The fact that its massive popularity continued for a decade means it is unlikely to have ended in the last 3 years. This potentially means there is a massive holiday home investment, and holiday rentals market in Germany that has barely been tapped into -- if at all.

Less people own their own home in Germany than any other industrialised nation. Because of this high incidence of people renting their home, the government has been under-pressure to stop land-lords putting rents up so quickly that residential tenants are forced onto the streets.

When people invest in Germany property they primarily do so for the security of a low (3-5%) yield from an easily found residential tenant, and to wait for capital gains over the mid-long term. These figures suggest that it may be worthwhile buying an untenanted German property and marketing it for holiday rentals, not covered by the government restrictions. This would allow a mid-high rental yield while capital gains are awaited.