_The real estate trends affecting Berlin, Toronto, Nairobi & Dubai

Berlin 

How has the tech boom influenced the residential market in Berlin? Is there a shift towards developing trendy homes?

London, Berlin, perhaps Stockholm, and then what? Europe’s IT and start-up scene is primarily focused in these three cities. Berlin ranks highly for lifestyle, and is known for its hipness, creativity and tolerance.

Other advantages include Berlin’s three universities, diverse research institutions, incubators and a slew of venture capitalists – in short, the perfect mix for creative industries looking at funding, networking and product development. 

The boom for the start-up scene has direct consequences for the office and housing markets. Berlin has developed Germany’s largest concentration of co-working spaces and innovation hubs.

In recent years, more than 50 corporate accelerators including Lufthansa, Metro and Cisco, have relocated their innovation hubs to Berlin. Meanwhile, the market for flexible office space is increasingly dominated by listings for schemes that accommodate several hundred workplaces.

On the residential side, the requirements of start-up entrepreneurs and IT specialists are demonstrated by a growing supply of serviced apartments and in the demand for buy-to-let condominiums.

Sven Henkes, Managing Director / COO, Ziegert Immobilien

Dubai 

Why are overseas buyers still targeting Dubai? What is the balance between investors and occupiers? 

A third of the world’s population is accessible within a four-hour flight of Dubai and two-thirds within eight hours, making the city a well-placed strategic hub for regional and global investors.

So significant is this investment that in 2016, 136 nationalities purchased property in Dubai, providing the city with a more diverse purchaser base than any other world city. 

Regulations introduced since 2013, aimed at deterring speculation and reducing market volatility, have heightened Dubai’s profile as a favoured destination for both regional and international property investors. 

The Emirate’s population has increased by 134% in the last decade, rising from 1.3 million to 2.4 million; this has supported the fundamental argument for property investment.

Add to this the government’s commitment to infrastructure investment (preparations for Expo 2020 include the expansion of the metro, airport and road network), improvements in market transparency and the increased availability of quality investment stock and Dubai is ensuring it can compete with the world’s top tier of global cities.

Maria Morris, Partner, Residential Sales, Knight Frank UAE

Nairobi 

Bringing work and home life together in mixed-use developments is a rising tide globally – are there similar examples in Nairobi? 

Nairobi, like many regional hubs in emerging markets, has a rapidly-expanding population and the city’s infrastructure struggles to keep pace. One challenge that this creates is traffic, which means a large amount of time is spent sat in the numerous tailbacks that occur in and around the city.

As a result, the concept of live-work-play mixed-use developments is rapidly catching on, with a number of projects offering office, residential and retail elements within one scheme. 

Garden City, a mixed-use development by Actis on Thika Road, is a high quality shopping mall with blocks of high-end apartments and offices under construction.

This is a model set to be mirrored by Centum’s Two Rivers development, and The Pinnacle which has just broken ground on Upper Hill. Simple solutions are also being used to create mixed environments by linking separate neighbourhoods.

For example, the new footbridge over the Nairobi River connects an office development, 14 Riverside Drive, with the residential development Riverside Park further illustrating this growing desire to be able to walk to work.

Ben Woodhams, Managing Director, Knight Frank Kenya

Toronto

What measures aimed at taming house price growth have been introduced in Toronto, and how much impact are they having? 

The provincial government introduced at the end of April 2017 new legislation designed to cool the housing market. It’s too early to determine what, if any, impact these measures will have, but many industry experts feel they will have little to no long-term effect. 

Planning policy in Ontario over the past decade has favored densification over new greenfield ground-level development. This has had the effect of limiting the supply of homes.

Basic economics says when demand exceeds supply, prices go up. In Toronto, the average detached home now costs in excess of US$1.5 million, driving many buyers into condos or out of the city. 

Some people have been moving farther from the core, accepting commute times that in some cases exceed two hours. We are now starting to see substantial price increases in Toronto’s bedroom communities. Buyers are at times lowering their expectations as to the type of home or the location that they can afford.

Marc Dexter,  Associate Vice President - Toronto, Newmark Knight Frank Devencore

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