housing in germany

Housing in Germany

While homeownership rates are relatively low in Germany, with about 52% of the population opting for rental accommodation, it is an attractive investment option because of the stability of the property market. However, there are some significant items to remember before you can even start searching for a home.

In Germany, why buy a house?

Consider the following points if you are torn between purchasing and renting a house in Germany:

You get a sense of peace and comfort from having your own house.

Homeowners have unlimited power over their property and are free to select suppliers of their services, make structural improvements, redecorate and have pets.

It is a sound financial investment to buy a home, particularly if you have unused capital sitting in a bank account, where valuation increases are unlikely.
In particular, Germany is a good place to buy, with low mortgage interest rates (typically 1-2 percent) and a very healthy property market.

Checklist purchasing land

One of the toughest financial decisions you’ll ever make is buying a home, so make sure you are completely prepared by doing your homework. We’ve put together a handy checklist of different points you should remember before buying a house in Germany if you’re not quite sure where to start.

Homebuyer Taxes & Costs

Buying a house is inevitably not just a matter of taking out a mortgage and making a bid on your dream home. There are also other taxes and fees on land involved. In learning what to expect, prevent the unwelcome disappointment of unexpected costs.


Hypotheticals in Germany

The majority of people who purchase a house will require a mortgage. In Germany, what are the basic requirements? What kinds of mortgages are available and what procedure is there to acquire one? How do you support a mortgage consultant or a financial advisor? Learn more about German mortgages for ex-pats in our guide.

In Germany, buy-to-let assets

If they live in Germany or elsewhere, there is no ban on foreigners buying a property in Germany. Therefore, as a non-resident, you can purchase property with the expressed intention of leasing it out, or if you move away from Germany, you can opt to rent out your own house. Although rental properties for homeowners can be a good source of income, rental contracts are pro-tenant in Germany, which means that landlords have strict responsibilities towards their tenants.

Allowances & Subventions

It can be costly to buy a home. The German government has made a number of grants, loans, and allowances available to those who are concerned about saddling themselves with inexpensive costs. This means assisting with the expense of purchasing or creating a new house, making your home more eco-friendly, or buying your first home in Germany as a family.

How much does buying a house in Germany cost?

The expense in Germany of purchasing a home

Usually, the net cost to the buyer of buying a property is around 10 percent of the purchase price. This includes: 3.5-6.5 percent (grunderwerbssteue) land transfer tax; 1.2-1.5 percent notary fees;

Should you rent or purchase a property in Germany?

The German Demand for Land
Housing prices have risen significantly in Germany since the financial crisis, and have now reached the point where some analysts have cautioned about the risk of a bubble forming in major cities. The property consultancy Knight Frank, for instance, estimated that prices in Berlin rose by a fifth (20.5 percent) in 2017, making it the world’s fastest-moving city market.


How sustainable these rises are remaining to be seen: data released by the Bundesbank in early 2018 indicated that assets in cities and towns could be overpriced by as much as 15-20 percent.

This does not imply that you should be put off buying a house since some places are still affordable. Data published in 2017 by the German consumer organization Stiftung Warentest showed that buyers in Magdeburg and Cottbus could buy a family home of 130 square meters for EUR 200,000, but that they would get a small two-room flat in Cologne or Dusseldorf for the same amount, and only a dorm in Munich.

House concentrations in German towns

The Global Property Guide figures below give an indication of house prices per square meter in each city (based on data from the third quarter of 2017).


Munich: 5,839 EUR (apartment), 4,233 EUR (family home)

Hamburg: 3.669 EUR (apartment), 2.529 EUR (apartment) (family home)

Berlin: 3.593 euros (apartment), 2.321 euros (apartment) (family home)

Frankfurt: 3.167 euros (apartment), 2.500 euros (apartment) (family Home)

Cologne: Euros 2,671 (apartment), Euros 2,240 (family home)

Hanover: 2.257 Euros (apartment), 2.0077 Euros (apartment) (family home)


In Germany, renting

It is very common to rent in Germany, with a little over half of Germans living in rented accommodation. In the major cities, this is most widespread, with Berlin having a remarkably low home-ownership rate of just 15 percent.


Rent prices in Germany rose by 7.2 percent during 2017, according to Bundesbank results. Global Property Guide data reveals the average rents and yields in three major cities for a 120-square-meter apartment:


  • Munich: EUR 2,250 a month, 2.9 percent yield
  • Berlin: 1,500 euros a month, the yield of 3%
  • Frankfurt: 1,500 euros a month, 3.7 percent yield

How to find a house in Germany

Properties may be sold individually or through a real estate agent (Immobilienmakler). In this case, it is typically the purchaser’s duty to locate a property they are interested in and then contact the owner or their agent.

This also suggests that the seller normally pays estate agents, although this is not always the case. Since the fees for agents are usually 3-7% of the purchase price, it is necessary to verify who pays them. Via their national association, the IVD, you will find an estate agent.

Properties for sale may have a sign advertising their status on the window or notice board in the backyard, but this is relatively uncommon in Germany, so don’t count on spotting every house for sale, even on a street you walk down every day.

Portals of Online Properties


  • Immobilienscout24 (German only)
  • Immowelt.de (German only)
  • Immobility (German only)

Choosing an estate

Usually, Germans plan to buy a property and remain in it for an extended period, or for life, so it’s important to take time and not jump in when making your decision. Turnover can be poor in desirable or competitive places, so you can allow yourself a year or more to explore and buy the perfect German property in an ideal world.

Selling a property in Germany

It is important to consider how, particularly if you expect a sudden move, you will dispose of your house. As most of the transaction costs are charged by the buyer, it is relatively cheap to sell a property in Germany.

In addition, unless you’ve managed to pick a particularly common area, properties may be slow to transfer, and this can tie up a large amount of your money. The rental market is strong and even if you are a non-national citizen, you are allowed to own property in Germany, so you might be able to continue to benefit from your investment long after you leave the city.