Is Germany still a good place for property investment?
Real estate is a timeless investment with opportunities for growing income, but some places are more secure than others for making a profit.
Germany is considered a safe haven for investors because of its stable economy and the ongoing boom in its housing market.
It’s not only the economic powerhouse of Europe, but the fourth largest economy in the world.
The low risk and high demand means there’s plenty of opportunity for resale or buy-to-let, with more spending power in Germany than in the UK.
Find out more about property investment in Germany below.
The state of the German property market in 2021
Germany is still one of the best countries to buy property because of its resilient economy, with greater demand than properties available.
While the average property price in Europe fell in the five years following the global financial crisis in 2008, it rose by 12% in Germany.
When investments in the EU faced uncertainty after the Brexit referendum in 2016, Germany’s property market continued to attract investors and even overtook the UK’s property market for the first time in a decade.
And as global economies struggle with the effects of the COVID-19 pandemic, Germany remains relatively stable, causing the capital city of Berlin to top the rankings of prospective cities for property investors in 2021.
Germany consistently bucks the trend and remains a stable choice for property investment.
Plus, low interest rates and high quality of life continue to attract buyers and renters to Germany, with the increased demand for homes driving up prices in urban areas.
Even during the pandemic-induced recession in 2020, the average price of residential properties in Germany increased by 11.42%.
The current average cost of a property in a German city is around €5,000 per square metre with a rental yield of 2.9-3.7%, according to the Global Property Guide.
With the German property market and demand for housing continuing to grow, now is the best time to get ahead and invest in residential properties in Germany.
Best cities to buy investment property in Germany
European real estate investors are ranking Berlin as the best prospect for 2021, making the capital the most popular city for property investment in Germany.
The same survey also ranked three other German cities in the top ten, with Frankfurt in fourth place, Hamburg in sixth, and Munich in seventh.
These plus the rest of the ‘Big 7’ German cities (Dusseldorf, Cologne, and Stuttgart) remain popular choices for investors.
However, the demand far outstripping the supply of properties in the major cities is pushing prices up and turning investors and consumers alike towards ‘B cities’ as well.
Among these second cities, up-and-coming investment hotspots in Germany include Dresden and Leipzig.
City
Population
Reasons to invest
Berlin
4 million
Large investments in culture, education, and technology
Munich
1.5 million
Capital of richest state Bavaria, best quality of life
Frankfurt
0.75 million
European financial hub, beside the river Main
Dusseldorf
0.64 million
Second-largest banking city after Frankfurt
Cologne
1 million
Very diverse, creative media hub
Hamburg
1.8 million
Trade capital with the largest harbour in Germany
Stuttgart
0.64 million
A centre of innovation where many successful companies are based
Dresden
0.56 million
Rich in research and tech, huge industries for microelectronics and handcrafts
Leipzig
0.6 million
European City of the Year 2019, fast development
If you’re interested in buying property in Germany, we can help you find the ideal property to get you the best returns on your investment.
Contact German Houses today and our German-based bilingual agents can assist you with your property investment journey.