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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 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

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PROPERTY

How soaring German property prices are out of reach for buyers

With prices soaring in Germany's real estate market, more than half of renters say the dream of owning their own home seems increasingly out of reach.

How soaring German property prices are out of reach for buyers

Though Germany is traditionally a nation of tenants, the soaring cost of rent and the attractiveness of owning property means many are considering investing in their own home. 

But according to a new survey conducted by mortgage broker Interhyp, most tenants who are currently renting in Germany believe they will never be able to afford to buy a flat or house in their local area. 

The survey of 1,000 buyers and prospective buyers shows that the majority find the prices daunting and many consider buying a property in their own region either “unaffordable” or “barely affordable”.

Average property costs €540,000

According to the mortgage broker, house prices have gone up by 10 percent each year for the past two years in a row, leading many renters to see home ownership as an increasingly distant dream.

Data from Interhyp suggests that price rises in the real estate market have continued unabated this year and may even be accelerating. 

In the first quarter of 2022, the average cost of building or buying a property, including ancillary costs, was €540,000  – an increase of 14 percent against the same quarter last year. 

In 2021, meanwhile, the increase in the first quarter was nine percent against the previous year. In metropolitan areas, the average prices are significantly higher than elsewhere. In Munich, one of Germany’s most expensive cities, the average house price stands at €905,000, while the average property in Hamburg costs €750,000.

READ ALSO:

High prices are ‘off-putting’ 

Though Germany’s real estate market has long been considered a stable investment, it appears that spiralling prices are causing would-be buyers to lose confidence.

According to Interhyp’s survey, 65 percent of renters feel deterred from purchasing by the high property prices, while 44 percent think that the cost of property has become increasingly divorced from its actual value.

“Many of those we surveyed have the feeling that prices are rising ‘unceasingly into the immeasurable’,” explained Jörg Utecht, CEO of the Interhyp Group.

More worryingly, more than three-quarters (77 percent) of respondents believe that there’s a real estate bubble in Germany, with 58 percent blaming the low interest rates set by the European Central Bank (ECB) for the current property boom.

Not everyone agrees that prices are increasing due to low-interest mortgages, however: 46 percent believe low housing stock and faltering construction levels are responsible, while 36 percent say its down to speculators and investors. 

READ ALSO: EXPLAINED: The hidden costs of buying a house in Germany

Inheritance and gifts are key

For many people who are trying to calculate the affordability of buying, it’s important that they don’t have to sacrifice their entire lifestyle to pay off a mortgage, Utecht said. 

“People do want a property, but not at any price,” he said. “Above all, they want solid, bearable and manageable financing, where holidays and restaurant visits are still possible.”

When it came to the factors that respondents thought could assist them in buying a home, 40 percent said their DIY or renovation skills could help, 35 percent said luck would be a factor and a third (33 percent) said a persistent search could be decisive.

Flats in Berlin

Flats in Berlin. Photo: picture alliance/dpa/dpa-tmn | Zacharie Scheurer

For more than a quarter of Germans (27 percent), an inheritance, a gift or the support of parents is a prerequisite for being able to afford a deposit or mortgage, while 67 percent were also forced to rely on their own savings. Unsurprisingly, 77 percent also had to rely on a loan of some kind.

The average value of the respondents’ savings was €128,000, the average ‘gift’ received was €94,000 and the average inheritance was €158,000.

“The high purchase prices can often only be afforded through inheritance, donation or high savings,” comments Utecht. “Those who cannot fall back on funds from the family usually need a high income and quite a few years to build up savings before a property purchase is possible.”

State aid was also considered to be a crucial part of helping first-time buyers get on the property ladder: 42 per cent of the buyers surveyed had used subsidies from the federal government, the state or local authorities to help purchase their first home.

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

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