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Hudson Harris
Hudson Harris

Buy House In Germany

Properties in some German cities tend to be cheaper than in other European countries. Most city properties are apartments, with houses more commonly available in suburban areas. Broadly speaking, rural areas tend to be cheaper than cities.

buy house in germany

To answer this question, we need to take a closer look at the German housing market, as it might be different from what you are used to at home. Germany is, generally speaking, a rental nation. Only 43% of all households are owned property, which is way lower than the European average of around 70%.

While buying a house is seen as a lifetime achievement in some countries, this is not necessarily the case in Germany. Rental laws are very consumer-friendly, and it is not uncommon for Germans to live in one rented flat for most of their lives. Furthermore, most Germans who own a house purchase it to make it their own family home rather than to use it as an investment and rent it out.

So whether buying a house in Germany is worth it depends on your views on property ownership, your finances, and your intentions with the house. You can take a look at the buying or renting calculator from Hypofriend to get more details on your individual situation. Hypofriend is an expat-friendly all-digital mortgage service.

Experts recommend having 20-30% of the property price available as equity capital. The more equity you have, the better conditions for a mortgage you will get. So how much money you need upfront to buy a house in Germany depends on the purchase price of the house.

Next to equity capital and a mortgage, prepare yourself for the following extra expenses. They are based on the purchase price of the house or apartment, which you need to have available on top of your equity capital. These can easily add up to additional 5 figure costs, as you can see with the examples provided.

Next to understanding the total cost involved in buying a house, the best way to approach buying a house or apartment in Germany is to figure out your finances first. Start by calculating how much mortgage you can afford and hence how much your desired house can cost. You can do so with the calculator of Loanlink24.

In 2020, the average cost per square meter for buying your own house was 2.750 euros. Similar to rental prices, the costs for buying a house have drastically increased in the past decade, especially in the bigger cities. The prices are mainly driven by increased demand and too little living space on the market. Here is an example of the average square meter price for buying a house in the largest German cities:

Next to actively looking for your dream house online, you can also hire a real estate agent to scout for the property you have in mind. This way, you may also see properties that are not announced yet on the different online portals.

You cannot become the owner of a house, apartment, or any land without using the services of a notary in Germany. The notary mostly acts as a middleman between the seller and buyer and protects the accuracy of the land registry. You can also use the notary as an escrow service, meaning that you pay the downpayment to the notary, and only after signing the contract and everything working out will the notary forward the payment to the seller.

Buying a house can be a good investment in Germany, especially if you are living in Germany for the long term. In this article, you will find everything you need to know when buying a house in Germany, including the purchase procedure, the costs, and other tips, etc.

As a foreigner, you can also choose to buy your own house instead of renting one in Germany. In fact, buying can be a good idea instead of renting. If you plan to buy a house in Germany, you should make yourself familiar with the purchase process and know what you should pay attention to.

In Germany, the mentality is a bit different. Renting is still very popular. I know many local people who rent their homes even though they can afford to buy their own house in Germany. Many of them are just comfortable with renting, and they are paying such a low rent because they have been renting the same home for a long time. Besides, in my opinion, many German people do not like to take risks. Taking a big loan in Germany to buy a house is considered risky for them.

When you own your house, you have much more control over how you want your house to be. For example, you can make structural changes like making an extra room; you can have pets as you want; you can decide what kind of floor or heating you want, etc.

Unlike other investments like stocks, the price of the properties does not fluctuate as much relatively. For self-living property, you can sell it without paying the 25% capital gain tax. If you sell your investment property after you own it for 10 years, you also do not have to pay the capital gain tax. This makes buying a house in Germany an attractive long term investment.

To give you an example, our neighbors rented their house for around 1,500 Euro per month. For our house, we pay 1,500 Euro monthly for our mortgage. In my opinion, it makes so much more sense to own our house and pay this 1,500 Euro monthly for our mortgage, rather than paying the same amount monthly as rent.

So, if you are staying in Germany for a while, it makes sense to buy your own house. If you decide to leave Germany later, you can always rent out your property. It means that you can still benefit from your property investment even when you are not in Germany anymore.

For many people, buying a house in Germany is a huge investment. Getting a mortgage means that you will be in debt in the next 30 years or so. Unlike stocks or other investments, you may not be able to sell your house quickly if you need money. There is also no guarantee that your house price will rise in the future.

To get a good mortgage deal, it is better to pay at least 20% of the house price as a down payment. Besides the down payment, there are also many other fees such as notary or real estate agent commission. Without a big sum of money at the beginning, many people are not able to buy their own house.

When you rent a property, your landlord takes care of the repairs and maintenance. If you have your own property, you are required to deal with these costs. There are many ongoing costs associated with your property. For example, the house management fees.

Disclaimer: Please be aware that this article is intended to provide you some guidelines about buying a house in Germany. It is not an investment recommendation. Besides, this blog is not qualified to give you any professional financial advisory service according to German law. If you need more details and specific advice on your personal situation, we would highly recommend you to consult a mortgage adviser, a tax adviser, or an estate agent.

It can take quite a long time for property hunting in Germany. Once you find your property, it can take a month or so to finish the deal. In general, you can expect the below procedures when buying a house in Germany.

If you are thinking about buying your own house in Germany, the first step is to understand your finance. You should investigate into mortgages and understand how much you can borrow in principle. This gives you an idea of what kind of properties you can afford before you even start searching.

No matter if you want to buy a house in Germany for yourself or an investment property, the easiest way is to use this free online mortgage calculator. Just enter the house price, your down payment amount, and some other basic info. You can then see the different mortgage options in minutes and consult with a financial adviser there about each option.

When buying a house in Germany, you will need to sign the contract with the presence of a notary. During the meeting with the notary, the notary will read out your contract at a very fast speed. He needs to make sure that every party understands the contract fully.

If your German is insufficient, you can sign a proxy just like me in case you buy your house together with your partner who understands sufficient German. Otherwise, it is highly recommended to bring a translator with you during the notary meeting. Buying a house in Germany is a big investment and you should fully understand what you are signing.

The cost of buying a house in Germany varies greatly depending on the regions. In general, house prices have increased rapidly in the past 10 years, especially in big cities. Not only the house prices, but the rent has also increased significantly. To give you an idea, have a look at the below chart from Statista. It shows the purchase price per square meter in some major cities in Germany in 2021.

The crazy thing here in Germany is that even if you want to buy a house, it may not be easy to get one. In our case, it took us almost two years to find our house. We wanted to buy a completely new house in Germany and had been searching for a while. Our experience was that we had to be extremely fast to get one. There were times that we looked at a house. We told the agent that we needed a few days to think about it. A few days later, when we called the agent again, the house was already sold.

In the end, we saw an advertisement for building a new house. Once the advertisement was up online, we directly called and reserved our house, without even visiting the place. That was how we got our house.

In our case, our house was not built yet when we reserved it. So, it was only important to know where the house was located. When we were happy with the city and the location, we made our decision very quickly so that we could reserve the house.

Another thing you should know is that the average size of the properties in Germany is relatively small compared to those in the U.S. The average size of a flat in Germany is around 92 square meter, and that of a house is around 150 square meter. That is because the population density is much higher in Germany compared to the U.S.

As mentioned before, you can use Yourxpert to get a free online initial assessment from a tax adviser. Or get tax advice from Property Tax International if you are a non-resident. It is important to understand all the tax aspects when buying a house in Germany. 041b061a72


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