Interview Private Wealth | “I believe in the city.”

The Hamptons has long been considered the quintessential retirement home for weary New Yorkers—not very appealing to cool city folk. Now the Hamptons are sold out,” says Michael Reiss.

The flight behavior of wealthy city dwellers during the Corona crisis has left its mark on the real estate markets. “From the Rocky Mountains to the Côte d’Azur, from wineries in Tuscany to holiday homes in the ski resorts of the Alps – many wealthy people have recently invested in second homes, mostly in the respective inland. They favored large complexes to create independence and privacy or to be able to take grown children back,” Reiss explains. Regions that were previously considered pure second home markets are in demand as supposedly safe escape points like never before in the home office year. In view of the limited supply, the prices there are also rising steeply. On the other hand, a breather can be observed in the big cities. Very ambitious ideas from sellers can no longer be implemented, or not so quickly. “That will change again in the future,” suspects the real estate expert, “in a very special situation, very special needs have been served in the last twelve months. It is rather questionable whether the price level for holiday homes and in all rural regions will remain the same over the next five years.

When the pandemic situation has eased, many will reconsider whether they and their children actually want to live in the country. Then the demand for real estate will return to the cities. That’s where life happens, here are the restaurants, schools, universities, leisure opportunities and social contacts. A large number of those who isolate themselves today will appreciate the short distances again tomorrow and seek personal exchange. Only the city offers that.”

The market expert therefore sees greater long-term potential for increasing value in properties in the big city. “The coming months should be a good time to position yourself. After all, the issue of living space is not going to ease up.” On the contrary: the need for space is increasing because many potential buyers now want an extra room in order to be able to use the advantages of working from home without having to move the entire center of their lives out of the city embarrassed. “Because of course the newly won freedom of being able to work from home from time to time is a valuable achievement.

Nobody wants to do without that anymore,” explains Reiss. “In the area of ​​upscale residential real estate, objects with additional work, fitness and wellness rooms will be in demand. More convenience through technology – smart homes – is also right at the top of the wish list.”

The next challenge for the German real estate market will be after the general election. “It’s about reducing the pressure on the housing market. Mutual recriminations between politicians and market participants don’t help – politicians, the real estate industry, tenants, owners and investors have to follow up together

Look for solutions.” The expert sees the greatest danger in issues such as wealth tax and interventions in the rental market being forced. “Some big investors say that if that happens, we’ll only do commercial construction,” Michael Reiss informs and concludes: “Ironically, this is a risk, especially for those who are looking for living space.

The supply in the city will then not increase and the prices will just keep going up.”