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Eight words to help you understand the German housing market

Eight words to help you understand the German housing market
Graffit that says 'rents down'. Photo: DPA
The housing market in Germany is not the easiest thing to get to grips with, especially for foreigners.

In fact, finding a place to live is getting increasingly difficult. Here are a few words to help boost your understanding of the German property world.

die Hausbesetzung

Let's start with a bit of history. In the autumn of 1970, students, homeless people and foreign workers occupied an empty house in Eppsteiner Strasse 47 in Frankfurt's Westend, for the first time in post-war Germany.

Since then the act of Hausbesetzung or squatting, became fairly widespread throughout East and West Germany and by 1980/81 there were 160 occupied houses in Berlin alone. Squatting was often seen as a political protest or demonstration and associated with the punk movement, at times leading to violent clashes with police.

Although nowadays there are much fewer occupations throughout Germany, there are still many to be found, particularly in Berlin.

A building being occupied in Berlin in 2018. Photo: DPA

die Hypothek

The German word for mortgage, die Hyphothek, is a compound of the Greek words for “under” and “lay” which, put together, mean a document for a loan.

Luckily mortgages in Germany are open to both Germans and non-Germans alike, but both groups aren't allowed to borrow equally. While Germans can take out up to 80 percent of the assessed value of the property, foreign residents are limited to around 55 to 60 percent of the assessed value. 

And like most faucets of life in Germany, a mortgage comes with several set rules. For example, you are not allowed to pay more than 35 percent of your monthly income towards it at any given time. 

READ ALSO:

der Mieterverein

As the majority of people living in Germany rent their homes, tenancy law has come to be one of the most important areas of German law over the past 100 years.

But most people (particularly internationals) don’t know what their legal rights and obligations are, so navigating the system can be tricky. For this purpose, there is the Mieterverein or tenant’s association, who represent the interests of tenants and clarify tenancy law issues.

These tenant associations have a long tradition and there are now 320 such organisations in Germany.

To find out how you can join one (and more) read our article HERE.

die Gentrifizierung

die Gentrifizierung is the Germanization of the English word gentrification, which was coined by the British sociologist Ruth Glass in the 1960s. It's come to characterize the change of areas from a lower to a higher financial status.

The process usually starts with “creatives” moving into cheap neighborhoods near the city center and as more and more creative people move in, the character of the district changes, becoming “trendy” and ultimately more expensive.

This process has led to a property price boom in all of Germany’s twenty biggest cities, including Berlin, Frankfurt, Hamburg and Stuttgart.

READ ALSO: In graphs – How gentrification has changed Berlin

Source: DPA

die Mietminderung

When you sign a rental agreement, the landlord agrees to provide an apartment in a certain condition for a certain price. If, however, there are defects which reduce the quality of the apartment, tenants have the right to reduce the rent for the period in which it no longer lives up to the standard agreed to.

Some common reasons for rent reductions are: mold, problems with heating, construction noise, damage to windows and doors, noisy neighbours and defective elevators. Some less common reasons, which, according to case law can also justify a rent reduction are having a brothel in the building and stray cats that being fed by the neighbours.

READ ALSO: The words you need to know before renting a flat in Germany

der Zins

If you have a Hypothek (mortgage) then the rate of Zins (interest) is something that will be of interest to you (no pun intended). Although Zins does not just refer to interest related to property, the origin of this word comes from 8th century German for “levy” or “tribute” relating to land.

der Makler

A house for sale saign. Photo: DPA

A Makler in the Immobilienbereich (property sector) and is the German equivalent of a real estate agent. Acting as the middle man between property owners and interested parties, they take over tasks from searching for a house or buyer, to creating offers and visits to contract processing and change of ownership.

Their fees vary from region to region, but you can expect to pay a healthy sum for their services and market knowledge; commission for sales are on average between 5.95-7.14% of the sale price and with rental properties, the negotiable commission fee is usually 1.5-2.29 percent of the rent.

der Mietspiegel

The Mietspiegel is literally translated to “rental mirror” and is the rental price index for an area. The object of the index is to provide transparency for both landlords and tenants, who can see if they are charging or being to charged a fair price for their rental property.

READ ALSO: Housing in Germany: Why are fewer young people buying their own homes?

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