Jones Lang LaSalle (JLL) believes that newer property in top German locations such as Hamburg, Munich or Frankfurt represents a good real estate investment.

Although there is some turmoil and instability in the market in terms of transactions and prices and banks are still reluctant to lend, overall Germany has an exceptionally attractive chance-risk profile, according to JLL’s report.

The report points out that low levels of liquidity in the real estate market and transaction levels are down and there is often a lack of clarity as to pricing levels, but certain property will always do well.

The report said: ‘Strong demand will still be observable for properties built in 1995 or later in top locations such as Hamburg, Munich or Frankfurt. In this market segment, regardless of the economic environment, only few or no price changes can be noted.’

However there is less demand for non-modernised property that dates from the 1950s and 1960s, located in structurally-weak regions and with a considerable maintenance backlog.

‘These properties will not become more attractive to investors in the future,’ it adds.

The report explains that between 2004 and 2007 demand for real estate was generated by the financing culture at the time which led to an extreme rise in property prices.

The report said: ‘Compared to competing investments (fixed-interest securities, stocks or commodities), residential property in Germany represents an opportunity with an exceptionally attractive chance-risk profile.’