Information on Germany Housing and the Real Estate Market

Housing is one of the primary considerations when you move overseas and a relocation to Germany is no exception.

Here’s what to expect when searching for property in Germany.

This is the first question to consider when you are living in Germany – and for most expats the answer is simple enough. Renting is the choice of the majority of expats in Germany. However, there are no restrictions on foreigners buying property in Germany.

In fact, renting in Germany is the choice of most locals too. Over half of the German population choose to rent a home, rather than own one. The reason for this is that buying real estate in Germany can work out expensive so the rental market is bigger than home ownership.

Consequently, the German property rental market is highly regulated, providing tenants with many rights. The consequence is that landlords find it tough to get rid of unwanted renters.

The best place to look for a rental property is in the classifieds of the local newspapers. The alternative is to enlist the help of a local estate agent (Makler) who will charge a commission but who will do a lot of the legwork for you.

Estate agencies are also the best place to start your search for a property to purchase.

Property rental prices differ across the country and from city to city. Rents in Berlin, for example, are cheaper than many other European cities. However, other German cities are expensive where property is in demand.

Note that most property in Germany is provided unfurnished but furnished properties are available too.

For a number of reasons a real estate purchase in Germany is a long-term investment. Firstly, it is not cheap to buy a property in Germany; up to 10% of the purchase price will be due for the notary, land registry, estate agent, searches, property tax etc. Secondly, mortgages in Germany are conservative and banks will only lend up to between 60% and 70% of the purchase price. Finally, any profit made when you sell your profit will be subject to capital gains tax.

Consider if the area you wish to live in is well served by public transport or transport links, is close to school or the office and accessible for local amenities.

If you are renting check if your desired area is a student town - there will be peak months for rentals coming free and similarly rentals being snapped up.

To check if you are searching in a good neighbourhood ask your estate agent, talk to other expats or work colleagues or use the internet to carry out thorough research.

Whether you choose to rent or buy a property whilst living in Germany make sure you know what you are signing when the contract is put in front of you. Ask your estate agent if it is possible for a copy of the paperwork in English, or ensure you have a team of experts who speak good English or a translator with you.