Buying a House in Germany: What You Need To Know - LTG Development Consultants
610
post-template-default,single,single-post,postid-610,single-format-standard,ajax_fade,page_not_loaded,,qode_grid_1300,footer_responsive_adv,hide_top_bar_on_mobile_header,qode-content-sidebar-responsive,qode-theme-ver-14.3,qode-theme-bridge,disabled_footer_top,wpb-js-composer js-comp-ver-5.4.7,vc_responsive
 

Buying a House in Germany: What You Need To Know

Buying a House in Germany: What You Need To Know

Some non-EU residents imagine Europe to be all identical, from one country to another. That is certainly not the case. Comparing living in Portugal, Finland, Spain, or Germany will show you many significant differences. 

One particular thing about Germany is that their ownership rate is way below the average one from Europe in general. Here are a few things you need to know if you are considering buying a house in Germany.

House Prices In Germany

As recently as late 2022 saw a fall in house prices across thirteen major German cities of between 4%-7% which has been a major boost for the property market. The rise in rents has caused many German citizens to look at the prospect of owning their homes which is one reason that mortgages have been easier to apply for over the last few years.

Great Differences Between Regions

German regional map

German regional map

Because Germany was separated between East and West for some part of the 20th century, people think the main divergence between people lies there. But in truth, the North and South are just as different.

The first thing you would notice, by looking at a map showing the population of this country, is that the South-West is much more populated than the North-East. In fact, Berlin and Hamburg are small pockets of life in the latter part of the map.

The second noticeable thing is the average age of the population. Again, the separation is the same, with the North-East being older than the South-West. For these reasons, a city like Munich in the South will undoubtedly seem more attractive than Hannover in the North. If you decide to make this city your destination, here is a list of removals to Munich

Fewer Homeowners in Germany

If you are interested in Europe in general, you will notice that home ownership is relatively high, reaching an average of 70% across the continent. However, Germany being one of the biggest European countries has a much lower rate of homeownership than other, slightly smaller countries in the region.

That is because in Germany, the ownership rate hovers around 50%. Three reasons explain it:

  1. The high cost of properties.
  2. Those mortgage interest payments are not deductible in their income tax return.
  3. Social housing is robust in Germany, which explains why so many prefer to rent their residence instead of buying them.

However, the last ten years have seen encouraging signs for home ownership, as interest rates were lower, and subsequently more people have been accepted for a mortgage at their bank. This has meant that the prices of houses in most German cities can get relatively high due to increased demand.

Is It Better To Buy or Rent a House in Germany?

It all depends on what you expect from your house. If your idea is to buy a small house and then sell it to buy a bigger one and make a profit, you should know that this is not part of the German mentality.

Most Germans when they acquire a property, expect to make it their home for a very long period and therefore the market is not as fluid as in the UK for instance.

The idea of renting in an area prior to purchasing a home is still high in the German mind set and can lead to a housing market that has many properties ready for sale at any given time.

Investing in the German property market has never been key for most people, however with the rise in availability and the German banks lending more money for mortgages than ever before it is a fantastic time to look into becoming a homeowner in Germany.

In Conclusion

With a Worldwide energy crisis and a huge rise in interest rates across Europe, buying a home is not as attractive as it once was. That said the fact that prices are falling across Germany it has become more attractive to buy a home there.

As with any large investment, the proper research and due diligence will help you to make the right decision based on your available finances.

No Comments

Sorry, the comment form is closed at this time.