The luxury real estate market continues to flourish all around the world, with seven-figure property deals in locations like Hong Kong, New York and London regularly setting new records. Although Germany is celebrated for the strength and security of its real estate market, high-end sales rarely reach the same prices experienced in more overcrowded European capitals. At present, it's estimated that luxury homes make up less than 1% of the total property on the market. However, it's worth exploring a little further exactly how we define a 'luxury' home, and what the benefits of this could be for investors in German property.
Defining luxury cannot be judged on price alone, as it's not uncommon to find five-bedroom homes in some areas valued at exactly the same figure as a one-bedroom flat in a more sought-after location. In certain parts of Germany, a semi-detached or detached house may fit within the luxury demographic if it is worth over €750,000, while flats must be worth over €5000 per square metre. This scale renders the German market relatively affordable in comparison to several other high-end markets - the cost of a spectacular German villa could easily only stretch as far as a modern family home in a city like London.
Price thresholds do differ regionally, however, and the properties that can command these top-end prices look very different in each city. In Munich, many luxury homes are large detached houses, whilst in Cottbus, it's more likely to be a mansion dating back to Germany’s industrial revolution with acres of land. At the southern edge of Berlin, this stately villa capitalises on its riverside location with spacious, tree-lined gardens and a tiered patio, with a sauna and wine cellar cementing the the property's luxury status. In the neighbouring city of Potsdam, this 19th century villa sits surrounded by beautifully manicured grounds that perfectly complement its Renaissance-inspired architecture.
Although both these properties are within close proximity of the German capital, their elegant design and spacious grounds wouldn't look out of place in the heart of the countryside. This exemplifies one of the most attractive aspects of Germany's luxury real estate market - although it may be smaller than its British or American equivalent, the properties that qualify for inclusion are often truly spectacular. Even in a central district like Frankfurt's Sachsenhausen, properties like this five-storey villa provide residents with every modern convenience, a summer terrace and a garden, all within a 10 minute drive from the city centre.
Space, light and private grounds are often valued more highly than an easy commute, with the island of Sylt and the spa town of Baden-Baden following closely behind Munich, Hamburg and Berlin in recording the most high-end transactions. In Baden-Baden, as much as 58% of all real estate sales are luxury properties, with opulent villas often priced at around €4 million. On Sylt, the limited supply of luxury homes can push their value up to €15-25 million, thanks to a steady stream of investors hoping to secure a second home at this exclusive seaside retreat.
With shops in exclusive neighbourhoods across the nation, Engel & Völkers are experts in managing high-end real estate sales. To view more luxury villas or to start searching for your own German investment, visit Engel & Völkers online.
Are you interested in the property shown in the picture? Take a look at the exposé of the exclusive villa located in Bayreuth.