FeWo-direkt together with Engel & Völkers have recently published their 8th Rental Market Analysis. The study involved 4,410 holiday properties – a sector that is gaining further interest from private investors.
[icon type=”circle” size=”medium” name=”home”] 32.1% of rental properties was purchased in the last 4 years
[icon type=”circle” size=”medium” name=”home”] 26% of owners plan to purchase another holiday rental property
[icon type=”circle” size=”medium” name=”home”] Germany is the top investment hotspot
Every second holiday property is growing in value
Holiday property is extremely popular as an attractive form of investment with mortgage lending rates which are currently low. Whilst the vast share of owners own only one holiday home (65 percent), almost one in seven is the owner of more than three properties (15.6 percent). More than half of all holiday properties (53 percent) are located in Germany, whilst second place goes to Spain, followed by Austria. 97.9 percent of owners are extremely satisfied with their investment decision.
“Almost half of all holiday properties has grown in value”
observes Tobias Wann, Vice President Central Europe HomeAway and head of FeWo-direkt in Germany. Germany also heads the field in new investments, with almost two-thirds acquiring a holiday home in their own country.
Investment aspects becoming more and more important
60.2 percent of the owners surveyed buy their holiday home both to use it for their own holidays and to let, followed by the motivation of old-age pension provision (46.2 percent).
“The uncertain situation on the finance markets and the desire for a stable investment is encouraging people to put their money into real estate. This especially benefits the holiday property segment, which for many people contributes both the value-increasing element of old-age pension provision whilst at the same time being a fun capital investment”
says Kai Enders, COO of Engel & Völkers AG.
Equipment level and condition of the building vital for letting
According to the respondents as a whole, the most significant purchase criterion remains the specific location of the holiday home (88.2 percent), followed by the purchase price (60.1 percent) and its geographical and regional location (44 percent). More than half of buyers who purchased a property since 2011 consider the letting potential to be one of the most important criteria for the purchase (52.5 percent). This is also shown in the shift that has been observed in the values with regard to the equipment level and condition of the building, which are major factors for an attractive holiday property. 80.5 of today’s renters for instance require a wi-fi or wired Internet connection in the property that they rent.
“The trend is towards ready-to-let properties which do not require any upgrading, but can be let immediately”
The demand for larger, higher-value properties is on the up
Overall, investors spend an average of roughly 188,000 Euro on a holiday home. The demand for holiday property in the 200,000 to 250,000 Euro price range has undergone particular growth. One property in four (23.7 percent) was actually in the price segment of 500,000 Euro and more.
“Only high-value properties in good locations should be selected as investment properties as they have a high resale value and a higher rent, and particularly have a much higher occupancy level, including in the off-season”
stresses Enders. At the same time, the trend is towards larger living areas: One-third of holiday properties (33.9 percent) is larger than 100 square metres.