How to buy a house in Germany

How to buy a house in Germany?

Germany is a good place to buy. It has low mortgage interest rates and a very healthy property market. Most countries’ real estate markets favor either buying or renting a home. In Germany half of the population rent their apartment. Homeownership rates are low in Germany when compared to other European countries. Half of the population live in rented accommodation. Buy a house is an attractive investment because of the stability of the property market. Detached family houses are hard to find in urban areas.

How to buy a house in Germany?

Consider the following points if you have not decided to buy or rent a house in Germany:

You get a sense of peace and comfort from having your own house.

Homeowners have more power over their property than renters. They select suppliers of their services, make structural improvements, redecorate and have pets.

It is a sound financial investment to buy a home. Capital increases are unlikely if you have unused capital sitting in a bank account,
Germany is a good place to buy. It has low mortgage interest rates and a very healthy property market.

How to find a house to buy in Germany?

Owners can sell properties on their own or through a real estate agent. So you can look for something interesting and then contact the owner or their agent.

The seller pays estate agents, although this is not always the case. Since the fees for agents are around five percent of the house price, it is necessary to verify who pays them.

You can find an estate agent via their national association, the IVD.

Properties for sale may have a sign on the window or notice board in the front yard. But this is not common in Germany, so you will miss something.

You can buy a property and remain in it for an extended period, or for life. So it’s important to take time and not jump in when making your decision. The number of possible houses available can be low in desirable areas. So you can allow yourself a year or more to explore and buy the perfect German property.

Checklist to buy a house

One of the toughest financial decisions you’ll ever make is buying a home. So make sure you are completely prepared by doing your homework. We’ve listed below different points to remember before buying a house in Germany.

Homebuyer Taxes and Costs

Buying a house is not only a matter of taking out a mortgage and making a bid on your dream home. There are also other taxes and fees on land involved. In learning what to expect, prevent the unwelcome disappointment of unexpected costs.

Mortgages in Germany

The majority of people who buy a house will need a mortgage. In Germany. What are the basic requirements? What kinds of mortgages are available and how to get one? How do you find a mortgage consultant or a financial advisor?

In Germany, buy-to-let assets

There is no ban on foreigners buying property in Germany. So, as a non-resident, you can buy a property with the expressed intention of leasing it out. Or if you move away from Germany, you can opt to rent out your own house. Rental properties for homeowners can be a good source of income. And rental contracts are pro-tenant in Germany. That means that landlords have strict responsibilities toward their tenants.

Allowances and subventions

It can be costly to buy a home. The German government gives grants, loans, and allowances available to house buyers. It assists with the expenses of buying or building a new house. It also helps with making your home eco-friendly or buying your first home as a family.

How much does buying a house in Germany cost?

Usually, the net cost to the buyer of buying a property is around 10 percent of the selling price. This includes: 3.5-6.5 percent (grunderwerbssteue) land transfer tax; 1.2-1.5 percent notary fees.

Housing prices have risen in Germany since the financial crisis. Some analysts have cautioned about the risk of a price bubble forming in major cities. Assets in cities and towns could be overpriced by as much as 15 to 20 percent.

Some places are still affordable. Data published in 2017 by the German consumer organization Stiftung Warentest showed this. Buyers in Magdeburg and Cottbus could buy a family home of 130 square meters for EUR 200,000. But that they would get a small two-room flat in Cologne or Dusseldorf for the same amount, and only a dorm in Munich.

The figures below give an indication of house prices per square meter in each city in 2020. 100 Euros are roughly 110 USD, or 8400 INR or 700 CNY.

Munich is between 9,500 EUR and 7,500 EUR per square meter.

Hamburg is between 6,700 EUR and 5,000 EUR EUR per square meter.

Berlin is between 6,000 EUR and 5,0000 EUR per square meter.

Frankfurt is between 7,200 EUR and 5,000 EUR per square meter.

Cologne is between 5,000 EUR and 4,500 EUR per square meter.

Hanover is between 4,000 EUR and 2,000 EUR per square meter.

Selling a property in Germany

It is important to consider how, particularly if you expect a sudden move, you will dispose of your house. As most of the transaction costs are on the buyer, it is cheap to sell a property in Germany.

Unless you’ve managed to pick a particularly common area, properties may be slow to move. And this can tie up a large amount of your money. The rental market is strong and even if you are living abroad, you can own property in Germany. So you can enjoy your investment without selling long after you leave the city.


Source: russianvagabond

The above cover image is somewhere in Munich, Germany. Photo by Kinga Cichewicz on Unsplash