The following story by Francine Carrel, international property reporter, OPP, is reposted with permission from OPP Connect.

Known as a nation of renters, only around 43 percent of those living in Germany own their property, but the number is slowly increasing.

The Institut der deutschen Wirtschaft Köln (IW) has conducted a five-year analysis of all 402 counties and cities in the country to find out where it’s worth it to buy property.

Residential property in Germany’s cities is overvalued around 25 percent, according to an index released Thursday by the VDP Association of German Pfanbrief Banks.

Prices are rising across the country, especially for new-built units.

IW concluded that buying a house or apartment made financial sense in only 27 percent of the regions examined.


The regions examined by IW (red = most desirable to buy). Source: Die Welt

However, they showed that more and more people are taking advantage of low interest rates in Germany, and forecast a continuing rise in homeownership.

Foreign buyers and renters also abound in the country. Over 7.6 million foreigners were registered as living in Germany at the end of 2013. Chinese buyers have contributed to the massive 18 percent house price rise in Frankfurt from 2011-2013, while Chinese, Scandinavian and Israeli investors are keen on Berlin. Rental yields are good and property can offer attractive capital returns for investors.

As financing a property purchase is currently so easy, and rents in Germany’s cities continue to rise, buying a property is becoming a more appealing option for many. VDP’s data showed rents for newly leased apartments climbing 4.3 percent year over year in the first quarter of 2014.

IW’s index showed that buying a property is far more likely to make sense in eastern Germany, while those in Bavaria are best off sticking to renting.

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription