From north to south, from west to east: The real estate market in Germany and where you should buy your house

The structure of the German real estate market, in addition to being closely linked to economic indicators, is also linked to the unique history of Germany. Residential property prices have risen in all parts of the country over the past 15 years, but growth has not been equally pronounced everywhere. In addition to the characteristic south-north divide in Germany, east-west scissors can still be observed. In this review, the real estate agents at Engel & Völkers Germany explains why these sometimes very clear regional differences arise and how you can find the ideal home for purchase in the current market situation.

Buying a house in Germany with a real estate agent: The price differences between the federal states

A look at the distribution of the square meter prices when buying a house in Germany quickly shows that the south of Germany is certainly one of the more expensive real estate locations, but can by no means claim this property for itself. Weighted by inhabitants, the most expensive federal state to buy a single-family home with Hamburg is even located in northern Germany - here, an average square meter costs € 3,823. In second place is Bavaria with 3,609 euros, followed by Berlin with 3,222 euros, Baden-Württemberg with 3,052 euros and Hesse with 2,599 euros. These countries are thus above the national average of 2,456 euros - above all the strong economic development of these locations, the high wage level and the innovative and future viability of the regions make them popular with many home buyers. The cheapest offers for single-family houses, on the other hand, can be found in the eastern German states of Saxony, Saxony-Anhalt and Thuringia, where the average price per square meter is between 1,156 and 1,399 euros. With 1,396 euros, the Saarland is also one of the less expensive locations for single-family houses. But even in these locations, the prices for real estate have risen! Since 2005, single-family houses in the aforementioned eastern German states have recorded an average increase in value of around 30 percent, in Saarland it has been 12 percent. The strongest growth was also achieved in Berlin, a country in the east of the republic, where the purchase prices for single-family houses have more than doubled since 2005 at 116 percent. For comparison: North Rhine-Westphalia, also the economic engine of the republic and with average prices of 2,215 euros per square meter close to the national average, recorded a growth of “only” 41.8 percent in the same period.

Even though the described trends of the south-north gradient and the east-west gap still exist in principle, the influencing factor of proximity to a metropolis is also largely responsible for the actual purchase price. Nationwide, home ownership in cities costs around 53 percent more than outside! When deciding which location you prefer for the purchase of your house, the various location factors can therefore be compared. Ultimately, your individual preferences should always be in the foreground, as the real estate agent Engel & Völkers Germany describes in the following section.

The purchase price of a family home in Germany always remains relative to its location

On average, 264,000 euros are spent in Germany on the purchase of residential property. However, the amount of living space that can be bought for this sum varies from location to location. An example: For this average sum, either a 35-square-meter apartment in the Munich district or a single-family house in the Thuringian Kyffhäuserkreis could be bought in 2018. With a living area of ​​309 square meters.

Even within one federal state there can be considerable differences: While in the Rhineland-Palatinate Westerwaldkreis, an average of just 2.9 net annual incomes are spent on the purchase of a 111 square meter property, the average in Koblenz, just a few kilometers away, is 7.1 net annual income. Wherever you specifically decide to buy a house, you should always evaluate based on the individual situation and your own wishes. How long is your commute? Where do friends and family live? How can you keep such distances short and at the same time buy a comfortable house with the desired location properties?