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PROPERTY

Altbau vs Neubau: What’s the difference and which should I rent in Germany?

It's more than just a question of their age and style; the type of building you live in in Germany can affect everything from your heating costs to your rental fee.

House facades of different eras in the Kreuzberg district of Berlin.
House facades of different eras in the Kreuzberg district of Berlin. Photo: picture alliance / dpa | Wolfgang Kumm

The obvious difference between Altbau and Neubau is their age. Generally, German tenant law classifies buildings constructed before 1949 as Altbau, while income tax law defines it as any building built before 1924.

However, you can often tell which category a building falls into just from the style. Altbau typically have features such as masonry walls, wood-beam ceilings, and boxed windows, while Neubau typically feature concrete walls and ceilings, as well as composite and insulated glass windows.

If you’ve dreamed of living in a beautiful building with a huge front door and ornate flourishes in the staircase, the Altbau life may be for you.

Though many Neubau are plainer to look at, some of the more modern ones may come with extras like air conditioning, a roof terrace, or a gym.

READ ALSO: Six confusing things about renting a flat in Germany

Heating and insulation

Speaking of air conditioning, the insulation and heating is one of the differences between Altbau and Neubau that’s likely to have a bigger impact on your quality of life. 

The typical high ceilings of the Altbau create a nice atmosphere but can also be difficult to heat, while the older buildings are also less energy efficient. 

This means that if you go down the Altbau route, you should check which renovations have been carried out, particularly on windows. A recently renovated and well-insulated Altbau means you could combine the ornate flourishes without having to choose between high heating bills and wearing three jumpers through the German winter.

READ ALSO: EXPLAINED: The hidden costs of renting in Germany

Neubau are more likely to be heated using central heating, which means you don’t need to carry out annual services or modernisations of the gas boiler — par for the course with most Altbau and older Neubau, and occasionally at the tenant’s own expense.

Within Neubau, there are differences depending on exactly how ‘new’ the building is, with those built in more recent decades most likely to have a high standard of soundproofing and insulation (and to have smarter floor plans and more modern perks like car parking), and those from the 1950s to the 1970s running the risk of the same issues as many old buildings.

If you are renting an apartment in a brand-new build, the energy efficiency and insulation will meet modern standards, but here there are extra considerations: new builds tend to experience cracks in the walls and other issues in their first few years while the building ‘settles’.

Rent, rights and operating costs

The age of the building you are renting can have a significant impact on your rights as a tenant.

If you’re renting an Altbau and find that some of the building’s features don’t quite live up to the modern standards you are expecting, it can be difficult to force your landlord to carry out the necessary modernisations.

In cases where tenants have found mold developing due to poor ventilation, drafts around windows, humid basements, sub-optimal sound insulation and heating systems, German courts have often sided with the landlord and ruled that they are not obliged to create a modern standard of living in an Altbau.

However, renters of an Altbau apartment can generally expect to pay less than for a Neubau.

According to a government report on Germany’s housing and real estate industry from July 2021, rents for first-time occupancy apartments cost an average of €11.29 per square metre nationwide and an average of €13.25 per square metre in the major cities.

Apartments for relet built in 2000 or later also have high average rents – from €11.81 per square in the big cities metre to €7.85 per square metre in rural communities.

Altbau apartments are cheaper on average in Germany, with an average cost of €9.46 per square metre, though in big cities, they can reach an average cost of €10.73 per square metre.

READ ALSO: Do I need to repaint the walls when moving out of a German flat?

Overall, the age of the building is just one factor to weigh up along with the specific details of the individual properties you’re looking at: total price including rent and operating costs; quality of renovations; how much the style suits you; whether the landlord seems reasonable and responsive; and location. 

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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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