© The Financial Times Ltd 2015 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
September 20, 2013 7:02 pm
Buyers in search of summer holiday property in Germany often turn to the country’s north and the oceanfront homes sprinkled across the Baltic and North Sea coasts. Yet nowhere in Germany are property values rising faster than along the country’s affluent lake region in the south where some areas have seen double-digit price growth since 2011.
Lake Starnberg and the rustic waterfront towns that surround it in Bavaria make up the heart of prime real estate in the region. Home prices in the lake towns of Berg, Feldafing and Ammerland have risen significantly between 2010 and 2012 with some prime property fetching up to €25,000 per sq metre, according to a survey from estate agency Engel & Völkers.
Much of the rise in property values is being fuelled by a strong economy in Munich, the Bavarian capital 25km to the north, which has traditionally brought deep-pocketed buyers to the area. Long an economic stronghold in Germany, Munich is bucking the economic malaise of many European cities. The city stands second in a survey of best European cities for real estate investment by PriceWaterhouseCoopers and the Urban Land Institute.
“The market here has remained remarkably resilient,” says Vivianne Pucer, an estate agent for more than a decade with Von Poll Immobilien, a German affiliate for Christie’s International Real Estate. “We’ve seen fluctuations in many luxury markets in Germany but this region has held its value quite well and buyers are prepared to pay a premium for property.”
Though the region typically draws buyers from within Germany, estate agents say low interest rates are also attracting foreign buyers, charmed by the lake’s relaxed environment and lack of Riviera-style glamour. Interest rates currently hover around 3.5 per cent for a 30-year fixed mortgage.
“Buyers from western Europe, the Middle East and Russia don’t just see this area as a good investment but also a good place to holiday,” says Florian Gross, managing director of Engel & Völkers’ Starnberg office. He estimates that about 30 per cent of the homes in the towns surrounding Lake Starnberg are holiday homes. “Its proximity to Munich is a significant draw for foreign buyers and that has kept demand for high-end property quite strong.”
Lake Starnberg (or the Starnberger See) has long been a popular destination for Germany’s affluent. Its history as a holiday destination dates from the 17th and 18th centuries when the Wittelsbach rulers, a European royal family and a German dynasty from Bavaria, built and purchased palaces in the area. The painter Wassily Kandinsky, who lived in Bavaria, drew on the area’s landscapes in his 1908 work “Lake Starnberg”. And the writer TS Eliot mentioned “Coming over the Starnbergersee/ With a shower of rain” in his 1922 poem The Waste Land.
Prime real estate around Lake Starnberg is mostly found in waterfront properties in the towns of Starnberg, Ammerland and Berg where a four- to seven-bedroom estate directly on the lake can cost between €7m and €10m depending on the level of amenities. Homes farther from the water can typically be bought for anything between €3m and €5m depending on size and lake views. Most of the homes that dot the lakefront date from the turn of the 19th century yet developers in recent years have built more modern structures with the kinds of updated amenities top-end buyers covet.
For €7.8m, Engel & Völkers is selling a 2,000 sq metre contemporary house on a large plot on the western bank of Lake Ammer in Schondorf. It has eight rooms and a large terrace with lake views. The top-floor living area sits behind a huge picture window with views of the lake. There is a separate guest suite, a spa and a three-car garage. The agency is also marketing an eight-bedroom manor house with an English-style garden in Starnberg for €6.9m. The living area measures 1,414 sq metres with seven bathrooms, two open fireplaces and an indoor swimming pool. Built in 1905, the property also includes a separate carriage house and seven-car garage.
The market for available luxury homes on the lake is tight in Starnberg and surrounding towns. And because the area is protected by the Ramsar Convention, the international treaty for wetland conservation, building codes are heavily restrictive.
“This can affect those people wanting to renovate extensively,” says Nadja Pfeifer, an estate agent with Sotheby’s International Realty.
Von Poll in Starnberg is marketing a Belle Epoque-style castle south of Lake Starnberg for €12.7m. The sprawling estate measures 18,000 sq ft and sits on a property of 122 acres with views of the Bavarian Alps. The property also has a private lakeshore with an underground parking garage that accommodates more than 20 vehicles.
Owners of high-end homes around Lake Starnberg can also tap into their property in winter. Alpine ski resorts, such as Garmisch-Partenkirchen, are an hour’s drive away. A property can thus be a lucrative rental investment for summer and winter. Homes of €3m and more rent from about €8,000 to €10,000 per month, depending on size, location and amenities.
● Daytime summer temperatures are mid to high 20s, January dips to 8C
● The area surrounding the lake has one of the lowest crime rates in Germany
● Buyers’ transaction costs are typically 8.5 per cent, including a 3.5 per cent transfer tax
● A 1.5 per cent fee to the notary who handles the legal aspects of the transaction is common
● Local bylaws heavily restrict construction on lake properties, so check carefully about large-scale renovations
● English is widely spoken and most estate agents are bilingual
What you can buy for ...
€500,000 A one-bedroom apartment near the lake in Ammerland
€1m A 100 sq metre two-bedroom condominium with lake views in Schondorf
€5m A 100 sq metre three-bedroom lakefront house with a pool in Starnberg
Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.