( www.german-property-for-sale.com )

June 2009 Update
Welcome

Welcome once more

to the monthly update from ProVenture. We hope you find this
short
newsletter of interest and keeps you up-to-date with the property
investment scene in Germany.

Kind Regards,

Mat Please click on the following titles to read the content or
scroll down to read the whole newsletter

German Economic Outlook ( #GermanEconomicOutlook )
Quantitative Easing?

( #FinanceUpdate )

Finance Update ( #FinanceUpdate )

( #ActivityontheGround )

Activity on the Ground ( #ActivityontheGround )

Top Tip
Cash flow positive investments

Latest Property Offers ( #LatestPropertyOffers )

German Economic Outlook

It has been a

truly confusing month on the economic front around the world and
also
particularly in Germany. Whilst demand for German export goods

remains far below norm, some signs of “green shoots” are
being
spotted. German unemployment figures confounded forecasters, pos
ting
a small fall in overall figures this month. At the same time,

Germany posted its first month of deflation in 12 years (0.1%)
and
this along with low or negative inflation across the Euro area

persuaded the ECB to keep base rates at their historic low of
1.0%.

Of interest is the growing debate, enlivened by Angela Merkel,
regarding what measures towards quantitative easing (QE) should b
e
taken in the Euro area. Germany’s memory of runaway inflation in
the
1920s still informs economic theory and any potential inflationar
y
measures such as QE would not be taken lightly. This is in sharp
contrast to other countries whose domestic position differs great
ly,
where inflation fears are not on the economic or political radar
at
all. Countries such as Ireland, Portugal, Italy, Greece and Spai
n
would perhaps be far more positive towards measures of QE availab
le
to the Central Bank.

It will be interesting to see how this crucial

difference in Eurozone members plays out over the coming months.

An indicator which
provides clues to future production and export growth is the grow
th
rate of industrial orders. In March this grew by an unexpected 3
.7%
and has given some the confidence to make bolder predictions for

2009:

“It is more than ‘the worst is
over’,” said Andreas Rees, economist at Unicredit in Munich.

“There is a chance we will get at least meagre growth in the
industrial sector in the second quarter.”

The combination of the generally

positive data has served to push the investor confidence index to
the
highest point since 2006. The ZEW index, which monitors expectat
ions
regarding economic activity in the next six months, rose for the

seventh consecutive month to 31.1 points, up from 13.0 in April.
It
was also the first time since June 2006 that the index was above
its
historical average, currently 26.2 points.

For Sterling-based investors, some

good news this month was the softening of the Euro which
currently
stands at 1.16 Eur:GBP, an improvement of nearly 15% from the tur
n of
the year.

Finance Update

Consistent with the “topsy-turvy” month were the trends in

long-term interest rate swaps over this month, the rates used to
fix
the 5 and 10 year fix rates our clients usually opt for. The mar
ket
is currently pricing in inflation to rise in the coming years and
rates climbed by around 0.15% in the month, putting upwards press
ure
on new mortgage rates.

Favourable loan-to-value finance is still available for our clien
ts
up to 80% of the property value or purchase price paid.

The swap rate is at:

http://www.swap-rates.com/EUROSwap.html (
http://www.swap-rates.com/EUROSwap.html )

Activity on the Ground

We have been very

busy during May preparing new properties to market through a
number
of suppliers. The market is firming to some extent in the city o
f
Leipzig, with property below 500k Euro receiving higher demand.
Our
aim is to continue to deliver well-refurbished property at a good
yield over current finance rates and we hope you find our new

selection of some interest. For those of you with particular
investment objectives, please let us know what you are seeking an
d we
can conduct a more focused search on your behalf.

Dates when ProVenture are in Germany can be seen by clicking here
(
http://www.german-property-for-sale.com/property-inspection-visits.htm
)

Top Tip – A Guide to Our Guide Prices

For the majority

of the past decade, property investment has to a great extent
been
marketed on the future expectation of capital growth as the prima
ry
driver for purchase. It’s been really interesting as the propert
y
market across the majority of Europe suffering capital value loss
es
to see investors turn to property that produces a high monthly re
ntal
yield as the attraction to invest.

As investors ourselves, these

“cashflow positive” investments have been the only game in
town
for us over the last 14 years and it never ceased to amaze us tha
t
investors were lured in on a promise of future capital growth. O
ur
approach has become the mainstream investment strategy, certainly
over the past 12 months, as investors seek more certainty in term
s of
a regular return on their capital invested. But what does a trul
y
“Cash Flow Positive” property look like? If you have not had
a
chance to read our e-book, perhaps take a look at page 25 for mor
e
information on this subject:

http://www.german-property-for-sale.com/investment-pageturner.htm
(
http://www.german-property-for-sale.com/investment-pageturner.htm
)

In the book, we
discuss the concept of “Yield to Break Even Point” (YBEP), th
is
meaning the net yield a property should deliver to achieve a posi
tive
cash flow each month. This may prove a useful concept to you as
an
investor as it makes allowance for both the finance rate paid and
also the type of property (unfurnished, furnished, multiple

occupancy) when evaluating an investment. This provides a deeper
level of examination over and above the basic yield stated for a

property. Unless there are specific reasons, all the properties
we
work with meet this criteria and we will continue to work hard to
find these types of properties for our clients.

You may have

different, and perhaps more complex ways, of determining the
viability of an investment that works for you. Why not post on o
ur
blog and get a conversation going between us as investors. I wou
ld
be very interested to hear what differing thoughts on this crucia
l
subject there are out there.

We have 14 new properties on our website today. Please check th
e
website for all our new property offers in the cities of Leipzig
and
Berlin.

We will be

bringing to market 3 new properties in the city of Halle in the
coming weeks so please check the website for regular updates.

Attached are some example properties from our selection. Click he
re to visit our site for all the latest properties. (
http://www.german-property-for-sale.com/search2.asp )

Finally, it is one
of the most interesting times for me as an investor that I have

experienced since starting in this business. Do your “due
diligence” and there are some truly great investments available
in
today’s market.

Happy investing and good luck.

This is a purely residential offer comprising one detached apartm
ent
blocks located in the region of Wahren, lying around 6km to the

north-west of Leipzig City Centre.
Located around 300m from the B6 road (Georg-Schumann Str), the pr
operty
enjoys good access to the AutoBahn and destinations northwards.

Primarily Residential property in Leipzig, approx. 672sqm

Potential yield of 10.65% can be expected, current yield 10.65%

Guide price: 325000€

( http://www.german-property-for-sale.com/details.asp?ID=68 )

There are 4 levels to the property with 2 apartments on each
level of
size between 65 to 75 sqm. Internally the apartments have been up
graded
and have laminate flooring, and some have fitted kitchens.

The property is fully let with the median tenant resident time of
7
years. With the property offered at just over 500 Eur per sqm, th
is
property represents good value in the current market.

Primarily Residential property in Leipzig, approx. 600sqm
Potential yield of 9.1% can be expected, current yield 11%

Guide price: 310000€

( http://www.german-property-for-sale.com/details.asp?ID=69 )
There are 5 levels to the property, each with differing configura
tions.
The are 9 residential apartments and 2 commercial units. Internal
ly the
apartments have been upgraded and have laminate flooring and a go
od
level of refurbishment.

The property is fully let and offered for sale at just over 465
Eur per
sqm, representing very good value in this location.

Primarily Residential property in Leipzig, approx. sqm
Potential yield of 12% can be expected, current yield 9.8%

Guide price: 500000€

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