Schick Immobilien
Jürgen Michael Schick is the CEO of Schick Immobilien.
Anyone looking for an apartment in Stockholm needs one thing above all: patience. On average, it takes almost nine years to get a chance at a rental apartment through the state allocation system. Nine years. In one of Europe’s wealthiest cities.
It sounds absurd, yet it is the logical consequence of a system that has regulated the market so heavily that it barely functions anymore. The same pattern can be seen in other major cities: Paris caps rents administratively, New York politically controls large parts of its housing stock, and Barcelona is experimenting with rent ceilings. What was intended as protection for tenants has, in many places, had the opposite effect: less supply, longer waiting times and, of course, rising shadow rents.
And it is precisely against this backdrop that one question arises, far too rarely asked in the German debate: where is the international capital flowing that is searching worldwide for stable residential markets?
A Shift in Perspective: Looking at Germany from the Outside
In Germany, we like to complain about regulation. Rent controls, caps on rent increases, restrictions on condominium conversion, the list is long, and the criticism is justified. And as industry representatives, we should continue to articulate it.
But there is a striking gap here between internal and external perception. What sounds like a locational disadvantage in the German debate reads very differently from the perspective of international investors. Anyone assessing markets such as Stockholm, Paris or New York on a daily basis does not see Germany as some uniquely overregulated outlier. They see a market with clear rules, protected property rights and a functioning rule of law. Above all, they see a market where demand is not letting up: major cities are growing, new households are being formed, and housing remains scarce.
This shift in perspective is crucial. While the German debate often sounds as though the market is on the verge of collapse, international investors take a far more sober view. They know regulated markets. They price in risks. And they arrive at a conclusion that may surprise many people in this country: for residential investors, Germany is one of the most attractive markets in Europe.
The Capital Is Already Here
The fact that this is not just theory can be seen in actual transactions. Ontario Teachers’ Pension Plan, for example, recently entered the German residential market. Capital from the Middle East is also flowing specifically into German residential real estate. These investors think in decades, not in legislative terms.
There is a simple reason why this capital is flowing into residential real estate in particular: housing is non-negotiable. Offices can stand empty, retail space can become obsolete. But people will always need somewhere to live. That makes residential real estate the most crisis-resilient asset class and, for pension funds that think in decades, the logical choice.
Often, however, international capital remains invisible at first. International investors frequently enter the market through local partners. Some Berlin-based investors suddenly appear with budgets that would have been unimaginable just a few years ago. The money is already in the market. It simply does not always come with an international label.
Berlin Is the First Port of Call
Within Germany, Berlin is the natural first port of call for international capital. The capital accounts for around a quarter of the German apartment building market, it is growing, it attracts companies and skilled workers, and the supply of housing is not keeping pace with demand. For investors who read a market through its fundamentals, that is a very clear signal.
Frankfurt and Hamburg follow as additional target markets that are receiving growing attention from international investors. But Berlin remains the reference point: anyone allocating to Germany starts in the capital.
Strict Rules, Clear Rules
To avoid any misunderstanding: regulation is a real burden. Every new debate about rent caps, expropriation or tighter tenancy law erodes trust and delays investment. Markets react to expectations long before a law actually comes into force.
But the decisive point is different: international investors do not avoid regulation. What they avoid is arbitrariness. Germany’s rules may be strict, but they are known, they are enforceable, and they do not change overnight. That sets this market apart from many others. And that is precisely why capital is flowing here.
International Investors Have Already Made Their Decision
In the end, one simple question matters: where does real demand meet predictable conditions? Germany offers precisely that combination. Berlin offers it more visibly than anywhere else.
While we in Germany are still debating whether the market can function despite regulation, international investors answered that question long ago with their capital. They are coming because, by international standards, the German market offers something that is becoming increasingly rare: substance and predictability. For international residential investors, Germany is not a fallback market. It is a safe haven.
The question that concerns me, therefore, is one we should ask ourselves: do we really understand what we have in this market? Or will we keep talking it down until only others still recognize its value?