Just a few months ago, a different scenario was considered likely: Due to the geopolitical tensions in the Middle East and the escalation around Iran, it was expected that many Germans living in Dubai would return to Europe and invest more in real estate. However, this trend has so far largely failed to materialize, with only isolated withdrawals to Germany being observed.
Instead, Sotheby’s International Realty is observing a different development: International buyers are increasingly returning to the German real estate market, increasingly focusing on locations such as the banking and economic metropolis of Frankfurt am Main.
“We had initially expected that German expats from Dubai in particular would return to Germany in greater numbers due to the geopolitical uncertainties. However, we currently do not see this development to the extent that many had predicted,” says Olivier Peters of Sotheby’s International Realty in Frankfurt and Wiesbaden. “What we are clearly perceiving instead is that international investors are increasingly viewing Germany as a stable and safe haven again.”
Before the Ukraine war, the share of international buyers in Germany in certain premium segments was around 30 percent. With the beginning of the war, this proportion fell to about 10 percent at times. At the time, many international interested parties considered Germany to be geographically too close to the war.
This perception is now changing noticeably. “International buyers have recognized that geopolitical risks are now a global issue, regardless of whether you invest in Europe, Asia or the Middle East,” Peters continued. “Germany is once again perceived more strongly as a comparatively reliable and transparent market, especially with regard to legal certainty, institutional stability and the continued high attractiveness of central business locations.”
According to Sotheby’s International Realty, the increasing interest of Chinese investors is particularly striking. While Chinese buyers in Germany often purchased smaller apartments as an investment in the past, this profile has also changed significantly.
“Today, we are increasingly seeing very experienced Chinese executives and entrepreneurs who come to Germany with a clear strategic perspective, which are often associated with company investments or company takeovers. Real estate investments are part of a larger economic commitment,” Peters explains.
Frankfurt in particular is benefiting from this development. The international financial metropolis convinces investors with its economic importance, its global networking and its comparatively high level of stability in an increasingly volatile environment. “Frankfurt is an example of what international buyers are currently looking for: security, economic strength and long-term prospects,” says Peters.
While global uncertainties continue to shift, according to Sotheby’s International Realty, it is clear that Germany has once again become more of a focus for international real estate buyers.
