These are difficult times. Many western countries are in or are facing recession and with credit conditions becoming more difficult is it a sensible time to buy in Germany and if so what should you buy? Germans are not spenders the way the Irish and British are. So while our GDP relies to a large extent on consumer spending theirs depends mostly on exports. What has been keeping our inflation low for the last decade has been cheap imports and affordable energy. But as living standards increase (in China, India and Brazil for example) the cost of their exports increase. In addition the demand for oil increases while its supply decreases continually forcing prices up. Add in the world credit problems and we have a worrying scenario for most countries. From the point of view of property investment it is not a case of where will I get the best growth but where is it safest for me to invest? In our opinion no country's property prices will have good sustainable growth for several years. But we believe Germany will prove in the long run to be the most stable country in Europe and one of the most stable countries in the world.

Rising inflation is one factor which will contribute to property prices. In countries like the UK, America, Ireland and Spain where the average amount of debt per capita is huge (and unsustainable) and where the average person cannot buy the average property, mortgages will become more restrictive and expensive, fewer properties will change hands, the unsold supply will continue to increase and prices will continue to fall. In Germany the amount of debt per capita is low. German banks have always been conservative and never lend beyond the means of a borrower. In Germany, more than in other countries, inflation threatens the savings of many a citizen because investments have traditionally taken the form of savings accounts or bonds and inflation decreases their value. The parameters on the German residential real estate market are favourable. For one thing, the number of building permits issued has dropped by about a quarter in 2007. Accordingly, the limited rate of construction and the rising number of households are reflected in a steady decline in Germany's vacancy rates in recent years. And while the average household income in Germany has gone up by about ten percent since 1995, rent rates still linger on the level of twelve years ago. Purchase prices and rent rates in Germany are very likely to go up. People spending their adult years in a paid-for property will spend no more than five to ten percent of their income on housing costs, compared to the 25 percent that tenants pay. And as inflation increases, so too will housing costs. Germany is facing a housing shortage because the construction of new housing is steadily declining while the number of households continues to rise (even though the population is falling slowly because the number of smaller households is actually increasing). To owner-occupiers as well as to owners of let residential property, the risk of rising rent rates is moot. So if you were to buy residential property you would at least neutralise your personal inflation risk to a certain extent.

Germans are concerned about security and pensions in their old age and are realising that traditional methods are not working or carry much higher risk. More and more are buying property and importantly, the average German can buy the average property.

But it is not just a case of buying anything. You must buy the right way and at the right price. You must pay as little tax as possible therefore you must borrow a certain amount of the capital so you can offset interest against tax. If you have applied for a German mortgage in the past you will realise that it is a complex process which takes a very long time and often results in no mortgage or at best a low mortgage (approx 50%). In the light of global events, future predictions and common sense investment we have refined what we offer.

• High yield blocks which German banks will still finance well if the location is right and the majority of the units are residential.
• Low priced (cash buy) apartments in good rental locations, where you cash buy one and use the first one as security to remortgage to buy a second property.
• Properties with an existing transferrable mortgage on them. In this case you have to provide personal information so that the bank will accept you.
• Properties which are being offered by other agents at a significantly higher price. These latter properties may not necessarily be a good buy, it is more to indicate to our clients that we always publish the actual seller price, not one inflated by excessive commission.
• Properties which have something which makes them more attractive e.g. their specific location, low price or quality.