SHARE
COPY LINK
For members

PROPERTY

Where in Germany can you still snag a home for under €100k?

Real estate experts are warning ever more urgently of a property market bubble in Germany, as prices continue to balloon despite rising interest rates. But some parts of the country are still remarkably cheap.

Where in Germany can you still snag a home for under €100k?
A 'for sale' sign in Schleswig Holstein. Photo: pa | Daniel Bockwoldt

If you are thinking about buying your own house in Germany on a tight budget you can forget about the big cities. Even their metropolitan areas are probably out of your reach.

We decided to look at where in Germany you could afford a property on a budget of €100,000.

To make sure you’re not just getting a shoe box for that money, we also specified in a search on the property website Immobilienscout24 in April 2022 that the property should have at least five rooms and a floor space of at least 130 square metres.

The website, which displays offers from estate agents as well as private individuals, came up with 134 properties currently on the market across Germany.

‘Hidden gems’

What was revealed was a small cluster of properties in and around the small state of Saarland on the French border, while almost all the other properties were in east Germany.

In large swathes of wealthier western Germany there was absolutely nothing to be found in this price range.

Urban properties such as this Altbau in central Munich can’t be found for a bargain. But nor can homes in commuting distance from the major cities. Photo: dpa-tmn | Karl-Josef Hildenbrand

Both Bavaria and Baden-Württemberg, two of Germany’s richest states, had next to nothing on offer. That also goes for the a region of the west of Germany stretching from Cologne all the way up to the Danish border.

Even Brandenburg, once a paradise of cheap properties, is now a barren wasteland when it comes to bargain basement offers, due to the recent surge in interest among Berliners in homes in the surrounding countryside.

A small cluster of “hidden gem” homes could be found in the west in the small state of Saarland. As a former mining region, Saarland is one of the poorer parts of western Germany, but it is also famed for its beautiful Saar river and is close to the wine regions of the Mosel.

Anyone who fancies buying themselves a property just a stone’s throw from the French border should be warned, though.

SEE ALSO: How real estate in Germany has rocketed in the pandemic

Of the nine properties currently on the market in our filter, almost all come with words like “renovierungsbedürftig” (in need of renovations) or “für den Handwerker” (for DIY lovers) – both clear indications that you’ll have to invest quite a bit more money and time into the property before it’s in a condition that you could contemplate living in. For those of you who like nothing better that spending a Saturday afternoon in your local Baumarkt, these could be just the properties for you though.

The rest of the properties were spread across a belt of the country that starts in Lower Saxony and stretches southeast to where Saxony buts up against the Czech border.

The village of Seiffen in the Ore Mountains. Photo: dpa-Zentralbild | Hendrik Schmidt

Twelve of the properties turn up in a single district alone – Vogtlandkreis in southern Saxony.

In terms of salary levels, Vogtlandkreis is one of the worst off places in Germany, so it would make sense that its property market is also on the affordable side. But it is also nestled inside the Ore Mountains. Its national park could offer ideal refuge to those looking to move to a place that offers snow in the winter and long summer hikes.

Generally, the properties on offer are in small villages, but this isn’t always the case. One unusual property to crop up was a “city villa” with 13 rooms in the town of Zeitz in Saxony-Anhalt. 

Energy catch

Another thing that you should be aware of when thinking about buying a home on the seriously cheap side is the exorbitant energy costs that are likely to come your way once you’ve moved in.

Almost all of the houses that turned up in our filter, over half of them (70) had an energy efficiency class of H, which is the worst possible classification for energy efficiency in Germany.

Consumer watchdogs warned back in 2019 that you are likely to pay energy costs upwards of 13 euros per square metre for a home in the H energy class. That equates to utility bills of at least €1,690 each year. By comparison, a home in the energy category D has estimated energy costs of €6 per square metre.

And that number is likely to be much higher now due to the energy crisis caused by the conflict in Ukraine.

Only four of the properties in our search had an energy class of C or above.

SEE ALSO: Where you’ll find Germany’s most expensive apartments

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

PROPERTY

How Germany’s property boom could be slowing down

Prices continue to rise steeply in the German property sector - but experts are seeing signs of a trend reversal.

How Germany's property boom could be slowing down

What’s going on? 

The Federal Statistics Office has just released its latest figures on property prices – and let’s just say it’s not great news for would-be buyers. 

In the first quarter of 2022 – from January to March – house prices shot up by an average of 12 percent compared to the previous year. It was the fourth time in a row that properties had gone up in value by more than ten percent in the space of a year. If these latest figures are anything to go by, Germany’s property boom is still in full swing.

Nevertheless, there are few things about the property market in the Bundesrepublik that are giving experts pause for thought. 

The first is the fact that, from quarter to quarter, property prices don’t seem to be rising as rapidly as they were last year.

READ ALSO: How soaring German property prices are out of reach for buyers

In fact, from the fourth quarter of 2021 (September to December) to the first quarter of 2022, the cost of buying a flat or a detached and semi-detached house only went up by around 0.8 percent. 

In the previous two quarters, prices had risen by 3.1 percent and 4.1 percent respectively.

“This indicates a slight weakening of the dynamics,” the Statistics Office said. 

The second issue is that, with interest rates on the up, demand has all but collapsed. The third issue is the concerns of the Bundesbank that property prices could well be over-inflated. 

Does that mean people aren’t buying property right now?

Kind of. In any case, far fewer people were seeking out places to buy in the first few months of 2022 than they were throughout 2021.

According to the online property portal Immoscout24, the demand for properties for sale in the first quarter of 2022 dropped by 17 percent within one year.

Adverts for residential properties are staying up for far longer than they used to, and sellers are having an increasingly tough time finding buyers.

High-rise buildings in Erfurt

High-rise flats and older buildings make up the Erfurt skyline. Photo: picture alliance/dpa | Martin Schutt

Instead, it seems like Germans are returning to their age-old love affair with renting rather than buying. This could partly be to do with the fact that interest rates look set to rise over the coming years, making cheap mortgage deals increasingly hard to come by. 

“These developments could have a dampening effect on price trends in the medium term,” said ImmoScout24 managing director Gesa Crockford. This could offset the slight uptick in interest rates.

READ ALSO:

So what’s the outlook? 

Not all too rosy, unfortunately. Though prices could continue to rise in the medium term, some experts believe that the property boom will slow down after a decade or so. 

This is partly due to stuttering construction rates: at the moment, the construction industry is struggling against some serious headwinds, from ultra expensive building materials to endless supply bottlenecks. 

Germany’s Central Bank (the Bundesbank) has been warning for some time that property prices are inflated beyond their actual value.

In cities in particular, prices are between 15 and 30 percent above a level that can be justified by longer-term economic and demographic factors, the Bundesbank stressed in February.

This trend was amplified by the Covid pandemic, which saw people increasingly seeking living space outside of the cities where supply is scarce. 

Experts from German bank LBBW also say they expect a price correction if interest rates continue to rise strongly and the economy fails to recover. 

In this scenario, LBBW believes that price declines of 20 to 25 percent are possible.

Of course, this may not apply to all regions of the country equally. There tends to be big differences in price trends, for example, between the former East and West of Germany. 

One other area that’s still going strong is the buy-to-let market. While demand for homes for personal use is slipping, it seems there’s still a big appetite for so-called “capital investments” that are occupied by renters.

READ ALSO: EXPLAINED: The German property tax declaration owners need to know about

SHOW COMMENTS