As the German proptech space continues to develop, the coming few years promise more innovation and adoption of technology in proptech in Germany.
Germany is the most populous nation of the European Union, one with more than 82 million inhabitants. Its largest metropolis is its capital city of Berlin. Interestingly, Germany is also the next most popular destination for immigration after the US.
This great powerhouse nation boasts of an outstanding economy and is a world leader in many industrial and technological sectors. By terms of nominal GDP, Germany is the world’s fourth-largest economy. What makes Germany a developed nation is not just its advance LGBT rights, its high standard of living but even its universal healthcare system as well as tuition-free university education provision.
Popularly known for its rich cultural history, Germany has been home to many influential and successful artists, philosophers, musicians, sportspeople, entrepreneurs, scientists, engineers, and inventors. There are many large cities here with a social market economy, low level of corruption, high level of innovation along with a highly skilled labor force. Though the automotive industry of Germany is regarded as the most innovative and competitive in the world, it is known for opportunities in real estate investment too and is often known as a safe haven for global capital. This sets an interesting tone for us to further discuss real estate tech in Germany and the opportunities for proptech here.
However, high rentals are a potent issue here. A recent report showed that on average Germany-wide, anyone who moved homes in autumn 2018 had to spend €7.06 per square metre per month for their new apartment – 3.9 percent more than the earlier. These costs are for the Kaltmiete (cold rent) – before adding on bills and other costs.
Due to a limited supply of office space in the large cities, the prices have been rising. Its residential, healthcare and hospitality sector has been very popular as an investment opportunity by the global market. The growing real estate market also means more scope for real estate tech in Germany or proptech here. But before that, let’s take a look at the startup ecosystem of here.
Startups in Germany
It is no news that Berlin is regarded as Europe’s start-up capital and attracts many international young entrepreneurs. With lots of good funding opportunities and a great infrastructure, Germany is very conducive for starting up and sustaining. Here are some interesting start-up factors here:
- As per Forbes, Berlin is known as the startup capital of Europe and almost half (49%) of the startups on The Hundert’s list are based in Berlin.
- 20% of the startups have a woman in the founding team.
- Berlin is actually Europe’s 2nd biggest startup hub, right behind London.
- Germany startups tend to cluster around universities that foster entrepreneurship. 3 percent of all German founders call the Technical University of Munich, their alma mater.
It is interesting to note that in the past few years, there has been a rise in the number of startups in proptech or real estate tech in Germany. It is a hot sector that is witnessing high growth and increased interest from investors.
The high population of Germany drives its real estate demand as well as makes it a significant volume market. Though a significant number of new buildings have come up, they are still under the required number. The real estate sector, which was initially focused on land and buildings, is now looking at the information sector with renewed interest. This gives scope for a number of startups to flourish in the space of real estate tech in Germany.
With growing real estate tech in Germany, the country is home to a number of startups and entrepreneurs. The proptech revolution started here in 2015 with more than 25 startups existing in this space in the year. These startups offer solutions in various categories like renting/ selling of properties, agent matching services, marketplaces for real estate classified ads, meta-listing and meta-search services as well as crowdfunding platforms that help integrate fintech with proptech. Virtual and Augmented Reality is taking the market by a storm and changing the way consumers see property listings.
As per Unissu, the number of German PropTechs edges closer to 300 in number and with investment levels on the rise. Also, the proptech scene has grown and made their presence known both home and abroad. The number of German PropTechs is close to reaching 300 in number, with the vast majority based in Berlin (78) followed by Munich (26) and then Hamburg (20). Here are the top players in the proptech market:
Medici Living Group
Medici Living Group develops innovative and tech-enabled rental housing in our role as the largest co-living provider in Europe. They revolutionized 21st century housing and dynamically adapts our units to the latest global trends. As one of the world’s leading proptech companies. They promote both digitalization and customer service in the real estate sector, creating additional value for landlords and tenants. They can also help increase the value of the property substantially. Standardizing and automating management processes simplify the tenants’ experience simplified, which allows us to create seamless, hassle-free user experiences.
Quarters was founded on an endless passion for community and making using of co-living as the new lifestyle. The founders wanted to use that passion to take Co-Living global. They want to redefine the way people choose to live, work and play by providing unique shared environments by creating a home for our generation.
Exporo is a real estate crowdfunding platform, based in Hamburg, Germany. Simon Brunke, Björn Maronde, Julian Oertzen and Tim Bütecke founded it in 2014. It had a funding volume of over 9 million Euros in August 2015. With the slogan “Easy and direct investments in real estate”, Exporo enables investors to take part in real estate projects with as little as 500 €, which were previously only accessible to institutional, financially strong or professional investors. Investors also benefit from short run terms and attractive returns.
Delia Fischer founded Westwing in 2011 and her four co-founders and is now present in 11 European countries. They are your “curated shoppable magazine”, inspiring you every day with the newest trends, themes, stories, brands and products from the world of Home & Living.
McMakler is a full-service real estate service provider active in Germany, Austria and France and combines state-of-the-art digital analysis, marketing and communication technologies with the personal advice of its customers through its own local brokers. The company has developed into a well-known and established brand in recent years and, as one of the fastest growing real estate agents in Germany, is assuming the pioneering role in the Proptech segment.
Scope for proptech in Germany in the future
The millennial’s are ruling this growth and the increasing support for entrepreneurship also means that the sector of real estate tech in Germany can flourish. One can expect more platforms and increased tech adoption that can revolutionize the current real estate sector.