Real Estate in Germany

Real Estate in Germany

Current trends and developments

The prices, which are reasonable by European standards, offer good conditions for the development of a large number of different economic sectors. Large numbers of people come to Germany to study, some become professionals here, and entrepreneurs see excellent prospects for successful business.

For example, real estate construction in Germany has grown strongly in recent years. Just under one million transactions were recently registered on the German real estate market. By far the most important real estate category here was residential real estate - where more than 700,000 purchase or sale transactions of developed and undeveloped properties were recorded. In 2020, around 19.3 million residential buildings were counted in Germany (

However, there are other factors that in turn have an impact on the real estate market. For example, increasing internal and external migration continues to cause a shortage of housing in areas with developed infrastructure, which in turn leads to a significant gap between supply and demand.

Thus, the demand for urban housing has led to a significant increase in rents in cases of initial settlement, as well as an increase in the prices of building land, houses and apartments when they are purchased. According to the Federal Statistical Office, prices for residential real estate (house price index) in Germany increased by an average of 10.9% in Q2 2021 compared to the same quarter of the previous year.

This issue is particularly significant for the country's major cities. As reported by Statista Research Department, Munich, Frankfurt am Main, Stuttgart, Berlin, Freiburg, Hamburg, Darmstadt, Düsseldorf, Mainz are the cities with the highest rental prices for apartments in Germany in Q2 2021.

The low interest rates for housing loans also affect real estate prices.

In 2021, mortgage rates in Germany are lower than ever before in the history of home loans in the country, averaging between 0.8% and 2%, amid ever-growing demand for housing.


Many people have concerns about whether it is still worth buying a house or apartment in view of the ever-rising real estate prices. The answer: it depends on the circumstances. A comparison of purchase and rental prices in a region shows whether buying a property is worthwhile. The factor of how much annual rent is needed to buy a property can provide information about this. According to the Postbank Housing Atlas, the regional differences are large.

Property tax also has a major influence on the development of real estate prices.

The purchaser is not entered in the register as the owner until the land transfer tax has been paid. This tax varies from state to state and averages between 3.5% and 6.5% of the value of the property. If the search for the desired property is carried out with the help of a real estate agent, it should be taken into account that the brokerage services are estimated at 6% of the value of the property. The costs for the notary amount to a total of about 2% of the value of the property.

Despite these influencing factors, real estate is becoming increasingly popular as a capital investment.

Particularly in times of crisis, residents are placing more and more trust in real estate and investing less in other forms of investment. Rising prices on the German real estate market also offer significantly higher returns than many other capital investments. And so it is not only Germans who are investing in residential property, but also more and more international investors in the secure German real estate market.