GERMANY

Best Country for Foreign Investors in Real Estate (FDI Intelligence, 2023)

Best Country for Doing Business in Europe (World Bank, 2023)

EUR3.87 Trillion GDP, 4th largest in the world.

Receive the latest insights and research on the German real estate market by downloading the investment case below.

YOUR GUIDE TO PROPERTY INVESTMENT IN GERMANY

Property investment in Germany can appear to be a complicated process. To simplify it, IP Global has produced a guide to the logistics of investing in German property.

It covers all the necessary legal and tax matters as well as all the information you need in relation to acquisition costs, holding costs and exit costs when you decide to sell.

Furthermore, you can expect guidance on the process of arranging mortgage finance as well as key information on lettings and management.

Germany Property Investment

As a founding member of the European Union and prominent participant of the G7, Germany is one of the world’s great superpowers primed with secure property investment opportunities. Throughout multiple crises, Germany’s economy has proven highly resilient to external shocks. Germany is the third largest exporter in the world with an economy expected to reach EUR5.34 trillion by 2035. With the largest economy in Europe, it maintains its position as a safe haven for international capital in times of economic and political uncertainty worldwide.

Germany is the most populous nation in the EU and its population continues to expand due to increasing levels of inward migration. More than 4.5 million people migrated to Germany in the last ten years, bringing the working population to roughly 54 million people. Housing demand is a critical factor, making property a worthwhile investment as house prices throughout Berlin and other major cities experience a rise. In the second half of 2023, the housing market in Berlin saw an increase in asking rents by 21.4% year-on-year, while in Leipzig, asking rents also rose by 10.6%. With average incomes forecast to rise on trend with Germany’s economic growth, opportunities in both Berlin and Leipzig offer promise for buy-to-let investors especially as these are markets where there is a strong rent culture.

 

Germany in a Snapshot

Population

More than 4.5 million people migrated to Germany in the last ten years, bringing the working population to roughly 54 million people.

Housing Market

The market value of the German housing stock is forecast to reach EUR20.3 trillion by 2040, with house prices increasing by an average of 48% over the period.

Economy

Germany is the third largest exporter in the world with an economy expected to reach EUR5.34 trillion by 2035 (+60%).

Why Invest In Property In Germany

With a resilient economy and a persistent demand for housing, Germany presents promise to any investor’s international property portfolio. The long-term benefits make investing in Germany an attractive choice over other locations. In particular, Capital Gains Tax is not applied after a 10 year hold. Investors and new buyers can also benefit from the ability to secure pre-approved 10-year fixed rate mortgages under 4%, a relief during a time with volatile rates and financial uncertainty. In combination with the forecasts for house prices and rental prices, the potential profits for lets and resales make investment in Germany an exciting prospect over the long-run.

With more than 4.5 million newcomers migrating to Germany in the last decade alone, the construction sector has been incapable of keeping up with the demand for housing. Persistent supply and demand imbalances have created a 1 million housing unit deficit in Germany. Berlin is again ranked among the top cities in PwC’s Emerging Trends in Real Estate: Europe 2024 report as the fourth city for overall real estate prospects, with Munich and Frankfurt also included in the top 10. Germany’s real estate markets have continued to benefit from the country’s economic strength and effective navigation through the pandemic, with average prices continuing to increase by 7.3% on average over the past 5 years.

As Germany’s economy grew substantially over the past 2 decades, the incomes earned by its residents increased in a similar fashion. The number of households with an annual income of USD35,000 or below is expected to have fallen by 89% by 2040, while the middle- and higher- income bands are expected to grow exponentially over the same period. The number of HNWIs (USD1m+) and UHNWIs (USD30m+) in Germany has increased by 36% and 29% respectively between 2017 - 2022, significantly higher than the European average. Germany is expected to have over 3.4 million residents in this category by 2027, the 6th highest amount of any country after US, China, Japan, UK and France. This demographic will prop up the housing market and continue to drive value to German real estate.

In 2023, residential property investment in Germany was traded for around EUR7.5 billion. Already growing prior to the pandemic, the real estate investment market soared to new highs. Residential property is regarded by many investors as a better alternative to bonds, which resulted in stronger capital flows during more uncertain times.

The market value of the German housing stock is forecast to reach EUR20.3 trillion by 2040, with house prices increasing by an average of 48% over the period. Consumer spending on housing rent is also expected to follow a similar trajectory, growing by an average of 51% to 2040. Overall, the investment fundamentals look to remain in place for the foreseeable future.

Our Track Record in Germany

At IP Global, we consistently outperform our projections year-on-year and this is particularly prominent with our German investments. Since 2014, IP Global has invested over EUR130 million across more than 20 developments in Germany. To date, we’ve achieved an average of 109% of our rental estimates in this European powerhouse and continue to look for opportunities for capital growth and strong returns.

Key Benefits Germany Property Investment

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The Top Six Overseas Property Investment Questions, Answered

Whatever the shape and substance of your overseas property investment portfolio, you do not want to be overexposed to uncertain market conditions. Property has long been considered a safe and stable investment option, particularly when compared to more volatile alternatives, such as stocks and shares.  Whether you are looking for long-term capital growth or income […]

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FAQs

The German housing market is an excellent opportunity for investors. Historically a robust economy in the face of global economic headwinds, the housing market remains a strong long term investment choice for international investors. The market value of the German housing stock is forecast to reach EUR20.3 trillion by 2040, with house prices increasing by an average of 48% over the period. Consumer spending on housing rent is also expected to follow a similar trajectory, growing by an average of 51% to 2040. Property in Germany therefore promises a strong return-on-investment especially with the tax advantages of no Capital Gains Tax after a 10-year hold and low 10-year fixed rate mortgages available for international investors.

To find out more and request the 2024 Germany Investment Case here.

The top three cities to invest in Germany are Berlin, Leipzig and Munich. PwC named Berlin as the #4 city in Europe for real estate investment and development prospects in 2022. Berlin’s position as an international hub for business, innovation and politics attracts residents to the city, whilst regeneration and development projects only continue to provide more opportunities for investors.

Leipzig is the fastest growing city in Germany. The population is expected to grow by 16% from now to 2035, outpacing all other cities in the country. Meanwhile, the city is known for its rich culture, historic architecture, extensive parks and green spaces offering a wide variety of cultural and sporting activities. This has led to an extremely high level of resident satisfaction.

And Munich is Munich is the capital and largest city of the German state of Bavaria. With its iconic beer gardens, historic architecture, and thriving arts scene, Munich provides a lively and diverse experience for its residents.

If you are based outside the EU, you can still purchase property in Germany and secure a mortgage as an international citizen, in fact there are very attractive mortgage offers as the country welcomes foreign investment. We have put together a guide that covers many facts about property investment in Germany that are necessary to learn before choosing to invest abroad. Download the Investor Guide by clicking this link.

Download our Germany Investor Guide

Our properties in Germany

NEW LAUNCH

22 Parkside

LeipzigGermany

22 Parkside offers a modern selection of 16 one and two-bedroom apartments located in Leipzig’s lively Plagwitz neighborhood.

From eur 270,000

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Curey Park

LeipzigGermany

Curey Park is a boutique residence consisting of 9 studios and one-bedroom apartments in Leipzig’s up-and-coming Lindenau neighbourhood.

From eur 148,000

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Yves Quarter

BerlinGermany

Yves Quarter is a tasteful conversion with an added new build element in Berlin’s Köpenick neighbourhood. The one & two bedroom apartments offer access to a communal landscaped courtyard, as well as the benefit of private balconies or terraces.

From eur 325,000

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