Interview Private Wealth | "I believe in the city."

For a long time, the Hamptons were seen as the epitome of a retirement home for tired New Yorkers - not very attractive for cool city dwellers. Now the Hamptons are sold out," says Michael Reiss.

The flight behavior of wealthy city dwellers during the coronavirus crisis has left its mark on the real estate markets. "From the Rocky Mountains to the Côte d'Azur, from vineyards in Tuscany to vacation homes in the ski resorts of the Alps - many wealthy people have recently invested in second homes, mostly in their home country. They favored large complexes in order to create independence and privacy or to be able to take adult children back home," explains Reiss. In the year of the home office, regions that were previously considered purely second-home markets are more in demand than ever as supposedly safe havens. In view of the limited supply, prices there are also rising steeply. On the other hand, there has been a lull in the big cities. Sellers' very ambitious ideas can no longer be implemented, or at least not as quickly. "This will change again in the future," the real estate expert assumes, "in a very special situation, very specific needs have been met in the last twelve months. It is questionable whether the price level for vacation apartments and in all rural regions will last for the next five years.

Once the pandemic situation has eased, many people will think about whether they and their children really want to live in the countryside. Then the demand for real estate will return to the cities, where life is happening, where the restaurants, schools, universities, leisure activities and social contacts are. A large number of those who isolate themselves today will once again appreciate the short distances and seek personal interaction tomorrow. Only the city offers that."

The market expert therefore sees the greater potential for value appreciation in the long term for properties in large cities. "The coming months should be a good time to position yourself. After all, the housing issue is not going to ease." On the contrary: the demand for space will continue to increase because many potential buyers now want an extra room so that they can take advantage of the benefits of working from home without having to move the entire center of their lives out of the city. "Of course, the newfound 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 upmarket residential real estate sector, properties with additional work, fitness and wellness rooms will be in demand. More convenience through technology - smart homes - is also high on the wish list."

The next challenge for the German real estate market will come after the general election. "It's about reducing the pressure on the housing market. Mutual recriminations between politicians and market participants won't help - politicians, the real estate industry, tenants, owners and investors must work together to find solutions.

Look for solutions." The expert sees the greatest danger in the fact that issues such as wealth tax and intervention in the rental market are being pushed. "Some large investors are saying that if that happens, we will only do commercial construction," says Michael Reiss and concludes: "Ironically, this is a risk for those looking for residential space in particular.

Supply in the city will then not increase and prices will simply continue to rise."