Visitors to Hamburg are struck immediately by this great trading city’s air of prosperity. With an established reputation as one of Germany’s premier business cities, Hamburg can also lay claim to being one of its most exhilarating. During the warmer months, trim sailing craft nip up and down the Aussenalster river in the city centre, with the cleaned-up cityscape in the background.

But it is an area of the city that in the 1970s and 1980s became associated with immigrants, students, punks and a politicised Leftist cultural scene, that Monocle tips as a great place to buy an apartment this month.

Thanks to that early influx of young people and creative types, the Karolinen and Schanzen districts around the harbour and old slaughterhouse area are now lively, artistic, and commercially active. A blend of hedonistic, activist and eco-alternative lifestyles and philosophies co-exist with modern businesses.

Even outside Schanzen and Karolinen, Hamburg is positioning itself as a hub for investment. The city fathers are planning to extend the harbour into the area around Moorburg while a new HafenCity (harbour city) district is being built in the former Free Harbour area between the Speicherstadt (historic warehouse area) and the Veddel and should be complete by 2026. This is the largest city development project in Europe. Rem Koolhaas, Zaha Hadid, Hadi Tehrani and other big-name architects are all planning to build in Hamburg.

Schanzen and Karolinen’s neighbouring red-light district St Pauli, traditionally the poorest area of Hamburg, is undergoing building work on a scale not seen for decades, including hotels, cinemas and apartments.

A new exhibition area has also been built close to the borders of Schanzen and Karolinen as Hamburg aims to compete with Germany’s leading exhibition cities: Frankfurt, Hannover, Leipzig and Munich. Indeed, the politicians want to reposition Hamburg as a benchmark for all modern cities. And if that’s not enough to convince you of the city’s investment potential, just imagine how you could tell people “I’m a Hamburger” with relish.

Wake up at the guesthouse Schlafschön in Monetastrasse just 10 minutes from the Karolinenviertel. After breakfast, head down the Bundesstrasse and enter the Planten und Blomen Park for a refreshing morning stroll. Turn into Karolinenstrasse which is lined with interesting shops. Anna Fuchs, Hamburg’s internationally acclaimed designer, shows her womenswear collections in her eponymous shop. Then test some extraordinary-looking bicycles at Holy Bikes – after all, Hamburg is the perfect biking city. Grab a cappuccino at the Italian trattoria Cento Lire where artists and businessmen rub shoulders. Turn into Marktstrasse – this area was home to workers from the harbour and the meat district in the 1970s, and later to Italian and Turkish immigrants. During the 1980s, the Marktstrasse was the place where punks would congregate, but today you’ll find fashion shops – Herr von Eden is an excellent tailor – cafés and art galleries. Schanzenviertel is only a few minutes walk from here. For eats, follow the Marktstrasse to the end and turn into the Sternstrasse. On the right hand side, in the small Kampstrasse, you’ll find Artisan, Thorsten Gillert’s restaurant, one of the city’s most creative chefs. Turn into Schanzenstrasse. Hamburgers call the area Die Schanze – the Schanzen district. With shops selling fashion, music and organic food, and theatres and restaurants to visit, it is full of life. At the end of the day have a massage at Hamburg’s best turkish bath, Das Hamam in Feldstrasse.

From London
British Airways, Lufthansa, German Wings – up to five times daily

From Paris
Air France, Lufthansa – up to three times daily

From Milan
Lufthansa – up to three times daily

Roger Tanner
31, owner of Storm bicycle shop
“In the past few years Hamburg has become a more bike-friendly city. In the weekends I ride with a few guys for between one and five hours. In the south of the city the landscape is dominated by small mountains [the Hamburger Berge]. In the east it’s more windy and in the west there is a beautiful place to bike at night: the Elbchausse is a street that follows the river Elbe and is perfectly lit. Car drivers here are very tolerant.”

Lorenzo Deidda
37, interior designer and stylist
“I’ve lived in the Karolinenviertel for 12 years and it feels like living in a village. People know each other here. It’s the most creative place in Hamburg: you find art galleries like the Palme Galerie and organic shops like Lollo Rossa. There is the Orangerie Theatre and my favourite Italian restaurant, Cento Lire. The old houses dating from 1900 are going to be refurbished in the next years. I think I’m going to stay here for quite a long time. The Karolinenviertel is my hood, it’s the place I love most in Hamburg.”

Angela Richter
35, Fleetstreet theatre director
“Hamburg is a centrally focused city: almost everything that happens culturally is locted around St Pauli and the Karolinen- and Schanzenviertel. I like to eat in the Vienna restaurant. Another interesting place is the Erikas Eck near the old meatmarket – it’s open all night. Cab drivers, night workers and barflies meet here during the early hours. On the other side there aren’t many underground locations left in the district: years ago it was an area of immigrants, workers and punks. In the past few years a lot has changed. Advertising and internet companies settled here and residences were redeveloped.”

Anke Barenscher
36, guesthouse owner
“You can comfortably reach almost every place in the centre of Hamburg on the subway or your bike ­– this is what I love most about living in Hamburg. I used to go sledging with my children in wintertime in the Schanzenpark or take a walk around the Alster lake in the summer. Hamburg is traditionally the city of Hanseatic tradesmen. That’s maybe the reason why people here have such good relationships with each other.”

Prices for flats in old buildings
Hamburg €1,000 – 2,620 per sq m
Berlin €700 – 2,800 per sq m
Köln €1,000 – 3,000 per sq m
München €1,600 – 3,300 per sq m

Prices for flats in new buildings
Hamburg €1,820 – 3,190 per sq m
Berlin €1,700 – 3,500 per sq m
Köln €2,000 – 3,400 per sq m
München €2,100 – 3,550 per sq m
Source: IVD (Immobilienverband Deutschland), ivd.net

Engel & Völkers
Osterstrasse 156; + 49 (0) 40 2091 3700; engelvoelkers.com/hamburg
Grossmann & Berger Bleichenbrücke
Bleichenbrücke 9; + 49 (0) 40 350 8020; grossmann-berger.de

An agent’s fees are usually 5 per cent of the buying price split between buyer and seller. Property transfer tax is 3.5 per cent of purchase price and is paid by the purchaser. Another cost is the notary fee – once the buyer and seller have agreed on price, the property sales contract must be signed in the presence of a notary. This provides assurance that the transaction is lawful. The 1 per cent notary fee covers preparing contract, negotiations, the signing ceremony and entry in the land register.