Over the past few years, house prices in Germany have grown by an average of 2-3% annually. But the country's market is not homogeneous, and therefore one should familiarize oneself with the peculiarities of a particular city in which an investor plans to purchase an apartment or a house. Real estate in Oldenburg is a reliable investment, because the cities of West Germany have the greatest investment potential and are ahead of the eastern lands in terms of economic development: there are high rates of population growth and the consumer ability index, a large share of tenants and a rapid rise in housing prices.
Features of the Oldenburg real estate market
Oldenburg is the capital of the duchy of the same name, located on the banks of the River Gunthe in the Lower Saxony region, and one of the largest German cities with the highest quality of life for the population. A large number of cultural events are held in the center of Oldenburg, and this is due to the presence of such institutions as the city and state library, the city museum and the famous cultural center PFL. Shops and boutiques are packed here during the day, and bars are crowded in the evenings.
The popularity of Oldenburg is facilitated by the fact that 14.7% of the city's area is devoted to parks, forests, lakes, embankments and other places for outdoor recreation. Local residents even call Oldenburg a city-park, and the authorities sponsor the activities of four research centers specializing in the creation of renewable energy sources.
The third largest city in Lower Saxony can offer not only easy integration into society and expanding housing estates for immigrants - it also offers ample opportunities for investors.
Oldenburg offers a profitable investment in a wide variety of residential and commercial real estate: both old buildings and brand new houses are on the market.
The combination of renovated old buildings and classic Scandinavian villas creates an attractive contrast.
Oldenburg is a university city and a cultural and economic center of the entire region. The Oldenburg government actively attracts young scientists, highly qualified people with a high level of income. The settlement fully meets the expectations of the migrants and corresponds to the status of a city with a population of about 160 thousand people.
Although not all districts are equally popular: elite districts such as Ziegelhof and Gerichtsviertel are adjacent to the less attractive districts of Nadorst and Donnerschwee. The fact that housing prices are not very high here is probably due to the presence of unfinished construction projects.
Administratively structured, Oldenburg is divided into 9 districts, which in turn are also divided into 34 historically formed districts. The city is quite densely populated, and therefore free land plots for the construction of individual residential houses are in short supply. Although buildings are being restored everywhere, so far the prevalence of old structures has been noted.
In recent years, Oldenburg has lost a significant portion of the compact houses in the old streets of the center, but the city still has a lot of attractions.
Real estate in Oldenburg is characterized, for the most part, by quarterly dependence. At the same time, residential areas can be extended or traditional.
There are many luxurious old buildings, partially restored, in the city center. Wastelands were built up with two- and three-story residential complexes.
Those who are going to live in Oldenburg after buying a home tend to get an apartment in the center also because there is a comfortable area dedicated to pedestrians, as well as most of the hotels, shops, restaurants, entertainment and shopping centers.
The table below provides information on the characteristics of the popular districts and municipalities of Oldenburg:
| District or municipality | Peculiarities | Attractiveness for certain categories of the population |
|---|---|---|
| Ohmstede (Urban Area VII) | Accommodation in the countryside, recreation areas by the Bornhorster lake a few minutes' walk from the house, many attractive farmhouses. | Families, retirees |
| Kreyenbrück (Urban Area IX) | Mixed residential area, lots of space for young people and the elderly, good transport links, hospital in the immediate vicinity. | Families |
| Osterburg (Urban Area IV) | A lively, sprawling area, a fairly large selection of apartments. | Couples, lonely people |
Along Tirpitzstraße are expensive townhouses overlooking the water, while the rest of the houses are quietly located in the second row. The west of Oldenburg is dominated by classic, more rural residential areas.
The east is still home to a large number of classic farms and mixed residential areas. The range of prices here, accordingly, is also quite wide.
New complexes are being built in Krusenbusch or Kreyenbrück, and the entire southern side is now exclusively a residential area. In the north, especially in Nadorst, there are young couples and single people who love the proximity of the city and the urbanism of the growing quarter.
Dobben and Haarenesch are dominated by villas and larger townhouses. These areas are traditionally popular with families and seniors. Due to this trend, Oldenburg has recorded a large increase in the cost of housing.
In the west, for example in Wechloy or Bloherfelde, classic mixed residential areas prevail. In the east, the territory is partially built up with modern townhouses and farms in need of renovation and are in great demand lately.
Families and couples prefer to settle in the south, where simple houses at a reasonable price are located on residential streets, less often cottage villages.
Real estate in Oldenburg has long been considered a safe and secure investment. Oldenburg surpasses even Hanover in terms of dynamics and general price level.
The reason for this is the high quality of life and the stable economic situation in the city and in Lower Saxony in general. The high demand for apartments and houses in Oldenburg is rapidly reducing the level of affordability of residential real estate. The only exceptions are new construction projects that are under construction.
Oldenburg responds to the formation of high demand for real estate by developing vast vacant lots in the central parts, where residential buildings are also being built at the moment. In military districts like Donnershvi, project developers are focusing on compact houses, and some 240 new residential developments are now in their final stages of construction. Due to the favorable location in the north-east of the city center, local residential complexes attract whole families, married couples and single people.
According to the plan for the distribution of the Oldenburg budget for the coming years, a significant part of the funds will be directed to co-financing construction projects. Similar measures have been taken to improve the affordability of housing for low-income groups of the population. How this will affect price development is currently unknown.
In any case, the city already has enough land in attractive areas prepared for new residential buildings, which means that the constantly growing demand for real estate from migrants and investors will be satisfied.
The table below demonstrates the specifics of choosing an area for residence, typical for certain categories of citizens of Oldenburg:
| Lonely people | Married couples | Families | Students | Retirees |
|---|---|---|---|---|
| Center (Zentrum) | Siegelhof | Dobben | Haarentor | Bloherfelde |
| Many renovated old buildings, pubs and bars within walking distance, good communications and communication services. | Often there are small residential buildings, it is convenient to get to the center, there are many recreation areas. | Several high schools and the University of Applied Sciences in the immediate vicinity, the presence of cultural and entertainment centers, attractive residential complexes. | An ideal place to stay if you need quick access to the university buildings. These are mostly medium-sized residential areas with many apartments available for rent. | Picturesque residential area, attractive buildings with a garden, shops, pharmacies. |
Oldenburg (at least for the moment) is a classic tenant city, and therefore it is profitable for investors to purchase entire residential buildings for renting out apartments - for this reason, buildings are sometimes bought entirely with the funds of several investors.
The share of real estate purchases under a joint ownership agreement is about 40%, of which in 60% of cases a house is purchased, and in 40% - a condominium.
For such a large city, the real estate supply in absolute terms is below average. New construction projects are being implemented rather slowly. In addition, in recent years, the cost of apartments and houses has increased significantly, which led to a "freeze" in prices for the near future (in comparison with the dynamics of prices on average in Germany), but analysts promise that in a few years the situation will change for the better for investors. ...
Average rental prices
If we compare the cost of renting and maintaining an apartment in Oldenburg with the average cost of a rented apartment in Lower Saxony and in Germany as a whole, the cost of renting an apartment in Oldenburg will be 14.3% higher and 4.5% lower, respectively.
Rented housing in Oldenburg is quite in demand: according to statistics, it takes 14 days on average from publishing an advertisement for renting an apartment to concluding an agreement with a tenant. 
Residents spend 16.8% of their income to pay for the rent of residential premises, if we do not take into account the costs of utilities and other expenses.
Average purchase prices for real estate
Accommodation in Oldenburg is affordable. The average market price per square meter for an apartment in Oldenburg is 39.4% higher than the average for Lower Saxony and 1.9% lower than the national average.
In the southern districts of Oldenburg, such as Bümmerstede and Kreyenbrück, a new-build penthouse apartment of 120 m2 costs an average of 270 to 300 thousand euros. The sale of apartments in old buildings of a similar size can be carried out for 180 thousand euros - prices for such real estate rarely rise above 240 thousand.
The most expensive apartments, modernized and located in high-end areas, can be found in Haarenesch, Dobben and their surroundings. Old apartment buildings with an area of 145 m2 are rarely estimated by sellers at less than 420 thousand euros, but, as a rule, the selling price starts at 500 thousand.
In developing residential areas, prices for such apartments start at 600 thousand euros.
It should be noted that prices for housing located in new buildings are relatively stable, as there are few completed projects at the moment.
Reconstructed townhouses are located mainly in the vicinity of the center, while terraced houses are located in cottage villages on the outskirts. Bloherfelde attracts mostly families, and real estate offers a large number of private houses of 160 m2 in the price range from 320 to 360 thousand euros - the final cost will depend on the size of the land.
Investors who prefer to invest in commercial real estate can be advised to purchase a small hotel or restaurant in the center of Oldenburg, closer to tourist spots. Alternatively, you can reverse and buy a grocery store or small cafe in the less popular areas of Oldenburg, where the local population lacks available facilities to meet their daily needs.
The following table shows examples of prices (relevant for 2021) for commercial real estate located in the territory of Oldenburg:
| Property type | Cost (EUR) | ||
|---|---|---|---|
| in the center | on the outskirts | Area, m2 ) | |
| A restaurant | 415,000 (Dobben) | 265,000 (Haarentor) | 200 |
| Restaurant-hotel | 310,000 (Zentrum) | 360,000 (Wechloy) | 150 |
| Hotel | 760,000 (Dobben) | 450,000 (Nadorst) | 350 |
| Retail store | 120,000 (Haarenesch) | 70,000 (Blankenburg) | 50 |
| Office building | 2,218,000 (Zentrum) | 375,000 (Ofenerdiek) | 1074 |
| Industrial facility | 1,200,000 (Zentrum) | 875,000 (Etzhorn) | 260 (+ 2916 m2 land plot) |
| Commercial premises | 335,000 (Donnerschwee) | 245,000 (Ohmstede) | 86.72 |
The cost of commercial real estate in the city center will cost several times more, and the profitability will be high. But novice investors, realistically assessing their capabilities, will be satisfied with the payback rate of small retail outlets on the outskirts of Oldenburg.
Comparison of the real estate investment market of the most promising cities in Germany
Experts from Postbank, one of the largest banks in Germany, analyzed the macro- and socio-economic indicators of 402 settlements in the country, as well as the prospects for their development until 2030. The aim of the study was to identify the most promising markets in Germany in terms of long-term investment in residential real estate.
According to the research results, Hamburg, Munich, Oldenburg, Stuttgart and Bonn have the highest growth potential.
The investment attractiveness of a particular market is influenced by a set of factors:
- Demographic situation. The larger the population, the faster demand and housing prices grow. In the cities that turned out to be leaders according to the results of the study, the number of inhabitants over 3 years (from 2021 to 2021) increased faster than the average in Germany, that is, the growth was due precisely to the peculiarities of the cities, and not to the situation in Germany. According to forecasts by the German Federal Statistical Office (Statistisches Bundesamt), from 2021 to 2030 the population of Oldenburg will decline by 4.7% (in the central regions).
- Labor market. Cities with low unemployment rates are more attractive to investors for two reasons:
- absence of unemployment is a sign of a favorable economic situation;
- the working population are potential tenants.
- Price dynamics. The attractiveness of the real estate market is indicated by a stable rise in prices at a level above the national average - as a rule, this is the result of high demand. Postbank experts argue that the local Oldenburg market will remain stable or will grow by at least 1.5% annually over the next 15 years.
- The purchasing power of the population and the affordability of housing. In Oldenburg, the purchasing power of residents is higher than the national average, that is, the city's population is able to spend more money on services and goods, including residential real estate. It is also important to know the ratio of citizens' incomes to real estate prices - this indicates how solvent demand for residential premises is. Oldenburg has an advantage - Postbank analysts estimated what share of the income of a certain population group is the average mortgage payment, and it turned out that Oldenburg is the leader among other German cities in this area: for any category of the population (single people, families with children, pensioners and others) the share of mortgage payments was less than 35% in the structure of income. If housing is not affordable for many categories of citizens, then there will be many potential tenants in this market.
- Rental market indicators. If there are more tenants than homeowners in a locality, it is profitable for an investor to buy profitable apartments and houses for renting them out. In recent years, the rental rate has only increased.
- Economy and infrastructure. In order to adequately assess the investment prospects of Oldenburg, it is important to pay attention to some qualitative indicators:
- The level of development of the economy and the availability of industries. For an investor, priority should be given to cities that do not depend on production and services in any one industry. Oldenburg is home to many companies and enterprises involved in developed and economically significant industries. The city is one of the most important industrial centers of the country - here are the first tobacco factories in Germany, foundries and engineering plants, leather processing and glass production, horse farms.
- The presence of universities. Oldenburg is home to the famous Carl von Ossietzky Universität Oldenburg, where many foreign students study. It is worth noting that for cities with a population of less than 200,000 people (this is exactly what Oldenburg is), it is especially important to have educational institutions that attract students from abroad and from other regions of Germany - they create additional demand for real estate.
- The presence of large clinics. Germany is famous for its high-quality healthcare system, and therefore medical tourism is very developed here. Therefore, the presence of clinics creates a demand for rental housing near medical centers. In Oldenburg, there is the University Hospital Oldenburg (Universitätsklinikum Oldenburg), which is visited by patients who, for the most part, need the help of neurosurgeons and surgeons. It also deals with the treatment of cancer, and oncology therapy, as you know, takes a long time, during which the patient's relatives may need housing.
The mentioned numerical indicators for the 5 most promising cities in terms of real estate investment in Germany are presented in the following table:
| Factor affecting investment attractiveness | Oldenburg | Hamburg | Munich | Stuttgart | Bonn |
|---|---|---|---|---|---|
| Population growth (%). Average for Germany = 0.7% | 1.5 | 2.3 | 4.0 | 2.2 | 1.8 |
| Unemployment rate (as of July 2015,%). Average for Germany = 6.3% | 6.9 | 7.6 | 4.6 | 4.6 | 6.3 |
| Average annual growth in real estate prices (2011-2014,%). Average for Germany = 2.0% | 5.7 | 6.9 | 9.8 | 7.1 | 5.4 |
| Purchasing Power Index (all of Germany = 100). Average for Germany = 100 | 103.7 | 110.8 | 136.6 | 114.7 | 112.5 |
| The amount of annual income of one family required to buy an apartment. Average for Germany = 7 | 5.7 | 10.2 | 11.8 | 7.6 | 8.9 |
| Share of tenants in central regions (%). Average in Germany = 54% | 72.2 | 64.8 | 84.7 | 74.8 | 84.5 |
| Rental dynamics (2011-2015,%). Average for Germany = 34.3% | 9.9 | 34.6 | 46.2 | 90.9 | 20.8 |
So, in order to invest in profitable real estate in Germany and buy housing, Oldenburg suits all the main indicators that international brokers recommend paying attention to:
- demographic situation: the dynamics of the population is positive, there are prospects for further growth;
- unemployment - in a city with a population of less than 200,000 people, the unemployment rate should not exceed 7%;
- growth in housing prices: the recommended rate is from 2% per year;
- the share of tenants: people renting housing should be more than 50%;
- economic situation - the city must have at least 2 key industries;
- infrastructure - large universities and university clinics should operate in the city.
Cost of living in Oldenburg
If a buyer is interested in an apartment in Oldenburg because he is going to live in the city in the future, first of all, it is necessary to assess the main items of expenses that await after the move.
In the first place, as a rule, immigrants are interested in the cost of food products. In Oldenburg, food is more expensive than the German average, by about 12%.
| Food product | Cost (EUR) |
|---|---|
| Loaf of fresh white bread (500 g) | 0.99 |
| Milk (1 l) | 0.66 |
| Egg (12 pcs.) | 1.71 |
| Local cheese (1 kg) | 6.67 |
| Boneless, Skinless Chicken Breasts (1kg) | 6.96 |
| Beef (1 kg) | 11.82 |
| Apples (1 kg) | 2.08 |
| Bananas (1 kg) | 1.56 |
| Potatoes (1 kg) | 0.93 |
| Onions (1 kg) | 1.00 |
Oldenburg is a large city with a fairly large number of restaurants and cafes. The cost of catering services here cannot be called low, but if we talk about average prices in Germany, then the cost of dining out in this city is 7.16% lower.
| Lunch and drinks at the restaurant | Cost (EUR) |
|---|---|
| Lunch at an inexpensive restaurant | 9.50 |
| Three-course lunch for two in a mid-range restaurant | 40.00 |
| McMill at McDonald's (or similar set of dishes) | 7.20 |
| Cappuccino | 2.50 |
| Water (bottle, 0.33 l) | 1.70 |
The cost of maintaining a dwelling is also not too high - the cost of utilities in Oldenburg is 15% lower than the average in Germany.
| Communal service | Price |
|---|---|
| Power supply, heating, air conditioning, water supply, waste disposal, sewerage (for an apartment with an area of 85 m 2) | 180.67 € per month |
| 1 minute of conversation at a prepaid tariff of a local mobile operator (without discounts and activation of tariff plans) | 0.09 EUR |
| Internet (from 60 Mbps, unlimited, cable / ADSL) | € 27.50 per month |
As in any other city in Germany, people who often use public transport services find it more profitable to purchase a monthly pass. Its cost is 28.5% lower than the national average.
| Transport service | Cost (EUR) |
|---|---|
| One way ticket (city transport) | 2.40 |
| Monthly Pass (Regular Price) | 50.00 |
| Taxi "Start" (regular tariff) | 3.50 |
| Taxi (normal fare, for 1 km of the way) | 1.89 |
| Taxi, 1 hour waiting (regular rate) | 25.00 |
| Gasoline (1 l) | 1.32 |
In general, Oldenburg cannot be classified as a city with a high cost of living, but wages in the city are lower than the national average by 17%: 1,816.67 euros versus 2,190.48 euros per month (after taxes).
Conclusion
The real estate market is constantly changing under the influence of various factors, and investors are constantly looking for new investment opportunities. Germany is one of the most economically stable countries; residential and commercial buildings are in great demand here.
When there is a shortage of supply in the German real estate market and the market cannot keep up with the increasing demand from buyers for houses and apartments, investors are content with less popular investment options or even take risks and invest in real estate that they have not previously dealt with. However, as soon as construction projects located in large growing cities are put up for sale, all the attention of the capitalists turns to them. One of these cities is Oldenburg - a city that is ahead of dozens of other settlements in Germany in all indicators of investment attractiveness.
