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German Property Market

Germany’s residential property market has taken off in the last seven years, with apartment prices in the biggest cities rising more than 60% according to Deutsche Bank AG.

There are no legal restrictions on non-Germans owning property, and many expats have significantly higher income levels and housing aspirations. The only bar to foreign ownership of property might lie in the financial institutions that offer mortgages. They might require a higher down payment because of the lack of a long-term financial track record.

Residential property prices climbed about 31% in the past five years according to data compiled by the Association of German Pfandbrief Banks, or VDA. Buyers took advantage of record-low interest rates and rising incomes in a country where renting has traditionally been more popular then purchasing properties.

Savills estimates the cost of buying groups of apartments has increased even more. The average price of a properties sold in a block of at least 50 homes has risen to about 101,000 euros from 54,000 euros in the past five years. In Berlin, the price has jumped to about 141,000 euros from 59,000 euros.

Stiftung Warentest researched housing prices in 115 German towns and cities and came to the conclusion that Berlin and Munich saw the biggest hikes in prices.

Basically, this is a good time to purchase a house or apartment. Mortgage rates are low. There might be moderate increases, but the present tendency of low rates is expected to endure.

Unlike many other countries, Germans tend to buy houses for life. They don't often see the more typical, non-European practice of buying now and continuously upgrading. This explains why there are fewer real-estate market price fluctuations, though the demand for choice locations remains high.

The percentage of Germans owning their homes is surprisingly low compared with elsewhere. At about 46% being the lowest in the entire European Union. Thus investors should have little trouble finding permanent long term tenancy for their investment.

Regions in Germany

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