Due to the economic stability of the region, average European housing prices, high return on assets and legal protection of investors, citizens from Ukraine, Russia and other CIS countries are actively interested in how to buy housing in Germany and become the proud owner of an apartment, a small country house or an exclusive penthouse. An important factor that increases the demand on the real estate market in Germany is the absence of any restrictions for foreign buyers, which greatly facilitates the process of obtaining a residence permit.
An overview of the real estate market in Germany
As follows from the report of the Central Committee for German Real Estate, the German market is going through difficult times. After a five-year increase in the cost per square meter in many large cities, most apartments and cottages were overvalued. The reason for this was the active influx of migrants, as well as the creation of additional jobs in megacities.
Experts predict that 2018-2019 will be a period of a sharp decline in the price of residential real estate in Berlin, Munich, Hamburg, Frankfurt, Dusseldorf, from which potential investors will only benefit.
At the same time, experts note that regional housing will still rise in price, so future buyers should now think about studying the market and concluding profitable deals.
It should be noted that on the part of foreign citizens, there is still a demand for small houses in the village and small-sized apartments, which are bought for personal use or subsequent lease. The average cost of an apartment on the outskirts of the city is 40-45 thousand euros. At the same time, banks are willing to issue loans, and construction companies annually bring to the market 200-300 thousand new objects.
How to quickly find suitable accommodation
Before investing money, you, as a potential investor, should find a property that fully meets your needs and market trends. To do this, you can use one of the generally accepted methods:
- look at advertisements on the Internet or on the pages of printed publications;
- attract a professional broker;
- visit the developer's website (if you are interested in new buildings);
- engage the city government or consider bids submitted in forced auctions.
Be prepared for the fact that the search for residential real estate can take 1-2 months, and maybe even six months if you want to get something exclusive or at a lower price.
Each case is always individual and depends on many factors, such as the type of facility, its location, infrastructure availability, cost, year of construction, as well as market conditions.
How a broker can help
An intermediary who is well versed in the real estate market will help you quickly find an apartment or luxury house, having previously specified your requirements and financial capabilities. However, behind the screen of comfort, there is usually a fairly high percentage of the commission, which sometimes reaches 7.5%.
Moreover, some real estate agents deliberately offer more expensive housing options in order to get the maximum income from the transaction, or they too actively advertise, frankly, far from the best housing, convincing them to make a purchase as soon as possible.
Therefore, be vigilant and pay attention to the experience and reputation of the broker.
Developer's website: first-hand real estate
An apartment or house from a developer will cost you less due to the absence of additional commissions at the conclusion of a purchase and sale transaction, which are taken by real estate agencies. The average price of real estate objects on the primary market is 1500-2000 euros per square meter.
Moreover, at the initial stage of construction, an apartment or a house will cost you even less, but the risks will be much higher.
By visiting the developer's website, you can familiarize yourself with all permits, read customer reviews, as well as choose a layout and finishing methods.
The reputation of a developer can be easily checked by reading the opinions of clients and looking at the statistics of successfully completed objects.
Why newspapers and city administration are useful
Many German citizens (especially the elderly) prefer to sell apartments and houses the old fashioned way, publishing ads in the newspapers Alles, Annonce, Der Heisse Draht, Such & Find (the most popular is Sueddeutsche Zeitung, there are also special newspapers for Russians).
Often, properties from the owners are sold at inflated prices and represent the old housing stock. However, among hundreds of ads, you can find something really worthwhile, for example, exclusive in the Alps or inexpensive in Berlin - the main thing is to know German well and the market value of real estate.
If the newspapers turned out to be useless, we recommend that you visit the city administration, which will tell you what kind of housing is being sold and help you find contacts of the owners.
How to search for housing via the Internet
To find an apartment, a house by the sea and even an old castle for purchase, you do not have to apply for a visa and leave your home country - you just need to look for suitable options on German sites, for example, on ImmobilienScout24. There are thousands of advertisements with prices, detailed descriptions and photographs of properties.
Other recommended sites include:
- immonet.de
- privatimmobilien.de
- immopool.de
- kalaydo.de
- immobilo.de
With the help of special filters, you can select ads according to certain criteria, and the presence of direct contacts will allow you to quickly call the seller or send him an e-mail to agree on a date and time for a meeting to view the property.
However, be careful: such sites are often run by scammers who come up with stories for pensioners and gullibles in order to lure money out. Therefore, until the moment of registration of the purchase and sale transaction, any expenses are highly undesirable.
How forced auctions can be useful
In the event that an individual or legal entity ceases to fulfill its obligations to the bank on a loan received for the purchase of real estate, the sale of villas, apartments or houses of the debtors is carried out at an auction. As a rule, such objects are sold at a price lower than the market price, and this is successfully used not only by local residents, but also by foreigners.
You can find such announcements on the Internet using the keyword "zwangsversteigerung" or on bulletin boards in the courthouse. However, along with the advantages, buying a home from an auction has a significant disadvantage: an advertisement contains a minimum of information (area, price, number of storeys, region, number of rooms, year of construction), and it is not possible to personally inspect the object before purchasing.
In addition, the initial cost of an apartment or house can be interrupted by someone, and as a result, the initially advantageous offer may turn out to be unacceptable in price.
How to properly arrange the purchase of real estate
To avoid common mistakes and troubles when buying an apartment or house in Germany, you should take into account the recommendations of specialists, and also adhere to an algorithm of actions that looks like this:
- The seller and the buyer agree on the value of the property, which is based on the expert judgment of a qualified specialist.
- A bank account is opened and a notary is involved to accompany the transaction.
- A sales contract is drawn up, copies of which are handed over to the buyer and seller.
- Interested parties visit the notary to discuss and sign the contract.
- The notary prepares an invoice to be paid on the spot and fills in the Land Register (makes an advance entry).
- An invoice for the purchase of residential real estate is being formed.
- To certify the fact of purchase and sale, the buyer and the seller again visit the notary's office, who, after checking the documents, finally enters information about the new owner of the real estate in the Land Register.
As practice shows, most of the points in this instruction are simple and straightforward, but many investors are interested in the issue of interaction with banks.
What is the cost of housing and what other expenses will the buyer face?
As noted above, the cost of a one-room apartment, a country house or a luxury villa depends on many factors, the main of which are the location of the object, its area, year of construction, the availability of infrastructure and communications. Therefore, you can buy a modest apartment of 30 square meters for 40,000 euros, or you can spend all 200,000 euros on it.
Prices for most of the options on the real estate market range from 1,000 to 3,000 euros per square meter. Exclusive properties are much more expensive and start from 1,500,000 euros.
Average residential property prices in major German cities in 2021
Town | Average price in EUR per m2 |
|---|---|
| Koln | 3520 |
| Hamburg | 4820 |
| Berlin | 4110 |
| Dortmund | 1790 |
| Stuttgart | 4350 |
| Dusseldorf | 4250 |
| Essen | 1790 |
| Munich | 7190 |
| Frankfurt am Main | 4490 |
| Leipzig | 2250 |
To buy residential real estate, you only need money and a passport. If the transaction is made on behalf of a legal entity, you will have to take a document from the Chamber of Commerce confirming the legality of the company's activities on the market.
If a broker is involved in the search for housing, be prepared to pay a percentage of the transaction amount (usually from 3.57 to 7.5%). The amount of agency fees is not regulated at the legislative level, and some agents take advantage of this. Therefore, in order to save money, it is better to look for housing options without intermediaries!
The cost of notary services is a fixed 0.7% of the contract price of the property. Another 0.8% will have to pay for entering information about the owner in the Land Register.
If the apartment is bought using credit funds (mortgage lending), an additional fee of 0.5% is taken.
The purchase of real estate is not subject to VAT, however, there is a flat tax on the acquisition of a land plot, which varies at the level of 3.5-5% and depends on the territorial location of the object. Please note: if you want to sell an apartment or house purchased less than 10 years ago, you will have to pay tax on profits from speculative transactions.
Renting an apartment as an alternative to buying a home
There are situations when buying a home is not economically feasible, or there is no opportunity to get a mortgage loan, and there is not enough own funds to purchase real estate. In this case, you should consider the option of a long-term lease. Ads from owners or brokers can be found on the websites wg-gesucht.de, immowelt.de, mitwohnzentrale.de, etc.
Rental prices are different and depend on the location, area and condition of the facility. For example, the rent for a one-room apartment can range from 300 to 800 euros per month, houses will cost a little more.
If you want to save money, you can rent a small room or rent an apartment for several people. It should be borne in mind that the prices for utilities in Germany are quite high and, in addition to the fixed cost of rent, you will need to pay bills for electricity, water, heating.
Buying real estate with the aim of generating rental income
If you want to make a profitable investment, buying a property is the smartest decision. It is not without reason that many businessmen are now actively buying housing for renting and receiving a consistently high income from investment activities. As an owner, you can also lease or sell your property at a higher price and thereby guarantee protection against inflation.
If you are planning to rent an apartment in Bavaria (eg Munich) or Berlin, expect a yield of up to 4% per year. In smaller cities, this figure is higher and for apartment buildings it is about 7%.
Do not be afraid to invest in real estate - in the next three years, experts predict an increase in rental rates at the level of 9-10%. In addition, investments in the amount of 250,000 euros or more in commercial real estate GmbH for the purpose of organizing a business will allow you to obtain a residence permit (residence permit), which many foreigners dream of.
Questions Frequently Asked by Potential Buyers
If we analyze the search queries of users who want to buy real estate in Germany, it becomes clear that they are most interested in the possibility of obtaining a residence permit after buying an apartment or house, the conditions for obtaining a bank loan and restrictions regarding the lease of their property. Therefore, the information presented below will be very useful and interesting.
Is it possible to get a residence permit when buying real estate
There is an opinion that buying an apartment in Germany will allow you to obtain a residence permit and even German citizenship. However, by law, such privileges are not available to a foreigner who became the owner of an apartment or residential building.
The existence of rights to real estate can only simplify the process of obtaining a residence permit, thus confirming the applicant's solvency and causing a more trusting attitude of the authorized bodies.
In fairness, it should be noted that the purchase of real estate in the amount of 250,000 euros for the purpose of organizing a business is the basis for issuing a residence permit. However, the authorized bodies first need to approve the investor's business plan and agree on all organizational issues.
In addition, an entrepreneur must necessarily have an office and hired personnel, submit financial statements and pay taxes annually. If these conditions are not met, the residence permit may be canceled.
Is it legal to rent out an apartment immediately after purchase?
If an apartment or studio is bought in an apart-hotel, the property becomes the property of the owner, but remains under the management of the hotel administration for several more years.
The legitimate buyer can dispose of the property for 3-4 weeks a year. Only after the expiration of the contract with the hotel can you independently settle for a long time or continue to rent the apartment, but on your own behalf.
If an apartment is bought on the primary or secondary market on standard terms, the owner can rent out the apartment only if there are relevant documents confirming the legality of such an action.
We recommend that you definitely consult with a lawyer to get more information on renting an apartment - this way, you can avoid difficulties.
Loans for the purchase of an apartment: myth or reality
German law allows that a foreign citizen can take out a loan to buy real estate, provided that all procedures are followed. First, you must choose a suitable financial institution and notify the bank employees that you want to take out a loan to buy an apartment, then provide all the necessary information about this property and show a draft sales contract.
As soon as the bank gives you a written consent to receive a loan, as well as documents equal property rights with you, a contract agreement is signed between you and the bank, and the purchase is paid for with funds received from the bank.
As practice shows, refusals to issue bank loans for the purchase of real estate occur infrequently, the main thing is to comply with the approved algorithm of actions.
Finally
Before buying a residential property, you should carefully study the market and decide how much you are willing to spend. Independently and absolutely free of charge, you can find advertisements for the sale of housing on the Internet (on thematic portals or websites of developers), as well as in printed publications. In addition, noteworthy options often come across at forced auctions, and the administration of a German city can also give practical advice on buying real estate.
If you are tired of looking for housing on your own, seek help from professional brokers, but be prepared to pay a considerable amount for the services provided. And remember that buying real estate in Germany has both pros and cons, which should be carefully examined before making a deal.
The positive aspects are:
- high protection of investors;
- economic stability of the region;
- competitive prices;
- no restrictions for foreigners.
If we consider the disadvantages of buying a home in Germany, it should be noted that the owner of real estate purchased for personal use is not eligible for a residence permit.
Experts predict a further rise in prices for houses and apartments located on the outskirts of megacities, while a decrease in the cost of square meters, in their opinion, will affect new buildings and objects offered by the secondary real estate market.
