Frankfurt luxury flat prices rise on hopes of Brexit banking bonanza

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According to new data, the costs of new luxury flats have increased by 25 percent in the past year, fuelled by the hopes of the market that many of London bankers will relocate to the city after the Brexit.

The said increase puts the price of one upmarket two-bedroom flat at roughly 1 million euros ($1.2 million), making the city, which has the reputation of being the dullest in Germany, also one of its most expensive.

The plan of Britain to leave the European Union has prompted London’s banks and money managers to study moving parts of their businesses elsewhere so that they may be able to sell across the continent without extra costs or trade difficulties after Brexit.

Some of the popular choices that have emerged were Frankfurt and Dubin.

The increase in property costs in Frankfurt, revealed in city data comparing the cost of newly built apartments from January to June 2017 with the past year, comes as Frankfurt plans to construct 20 new skyscrapers in five years to provide apartments and offices.

Currently, there are more than 30 high-rise buildings on its skyline.

While the building was prompted by a long-running property boom driven by low interest rates, the possible migration of bankers from London has boosted investor enthusiasm, and prices, this year.

“We are ready for Brexit,” said the spokesman for Frankfurt town hall’s planning division, Mark Gellert. “We can imagine that the people who come to Frankfurt due to Brexit will take up this offer of high-end apartments.”

The results revealed that the price spiral centred on new luxury apartments, while other properties in less fashionable areas continue to be affordable.

According to Ireland’s Central Statistics Office, Dublin has also observed the prices of houses increase, by a little more than 11 percent in the year to June. During that time, house prices in London climbed by less than 3 percent.

A new study commissioned by the chief promoter of Frankfurt predicted that within four years, there would be 10,000 new banks in the city and that their arrival could generate tens of thousands of new jobs, from estate agents to building workers.

However, some are sceptical that this will occur.

“You can see the optimism that Frankfurt will profit from Brexit already filtering through in rising property prices,” said Christine Kuhl, a head hunter with Odgers Berndtson in Frankfurt.

“But the hiring of new staff has yet to start and I don’t expect it until Spring next year. Some of the optimism about thousands of extra jobs is also overdone. The real impact of Brexit may be more modest.”