The city, located in the state of Hesse on the Rhine River, topped the attractiveness ranking because property investors there can expect a gross initial rate of return of seven percent if the property is in a good location.
Following Wiesbaden on the list were Aachen, Freiburg, Frankfurt and Berlin.
Munich, one of Germany’s wealthiest cities, only ranked number 13. Düsseldorf did slightly better in the 10th position. But in both of these cities, an apartment house in a good location will only bring a gross initial rate of return of around five percent.
When other purchasing costs and administrative fees are taken into consideration, investors can only expect a net return of around three percent, less than the return on a 10-year German bond.
The list ranked the 25 top German markets and was based on data from real estate company Engel & Völkers as well as purchase and rental trends in various regions around the country. Besides the initial rates of return and price direction, the ranking also looked at the overall attractiveness of the property market and whether demand outstripped supply.
Other factors used in compiling the list were a city’s overall economic environment and local population growth.