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May 26, 2014

Yields are moderate in Germany


Last Updated: May 26, 2014
BERLIN - Apartments COST (€) YIELD (p.a.) PRICE/SQ.M. (€)
TO BUY MONTHLY RENT TO BUY MONTHLY RENT
45 sq. m. 108,225 500 5.55% 2,405 11.12
75 sq. m. 230,025 779 4.07% 3,067 10.39
120 sq. m. 489,360 1,362 3.34% 4,078 11.35
200 sq. m. 935,200 2,442 3.13% 4,676 12.21
FRANKFURT - Apartments
45 sq. m. 164,385 788 5.75% 3,653 17.50
75 sq. m. 308,025 1,182 4.60% 4,107 15.76
120 sq. m. 538,560 1,750 3.90% 4,488 14.58
200 sq. m. n.a. 3,066 n.a. n.a. 15.33
MUNICH - Apartments
45 sq. m. 218,160 773 4.25% 4,848 17.18
75 sq. m. 463,275 1,172 3.0% 6,177 15.62
120 sq. m. 774,120 2,066 3.20% 6,451 17.22
200 sq. m. 1,850,000 3,562 2.31% 9,250 17.81
Berlin: Charlottenburg, Friedrichshain, Grunewald, Karlhorst, Mitte, Prenzlauer Berg & Wilmersdorf
Frankfurt: Bockenheim, Bornheim, Nordend, Sachsenhausen & Westend
Munich: Au, Bogenhausen, Freimann, Haidhausen, Lehel, Maxvorstadt, Neuhausen-Nymphenburg & Schwabing
Source: Global Property Guide Definitions: Data FAQ See also: Update Schedule

For those who wish to buy or rent an old, but well-refurbished apartment, Berlin has more affordable options than Frankfurt or (especially) Munich.

Munich is Germany’s high-cost leader, of course. To buy a 120 square metre (sq. m.) apartment in Munich costs around EUR 6,500 per sq. m., while in Berlin it costs around EUR 4,000 per sq. m., and in Frankfurt, the same sized apartment costs around EUR4,500 per sq. m..  Rents are correspondingly pricey.

It is at the lower end that Berlin´s cost-advantage is most apparent: A 45 sq. m. apartment in Berlin will cost around EUR 108,000, while in Frankfurt the same size apartment would cost around EUR 165,000. 

Wherever you buy, you are unlikely to have much problem letting your apartment.  Especially at the lower end there is an acute shortage of affordable apartments as the German boom continues, sucking in workers from all over Europe.

The higher yields in all three cities come on the smallest apartments, and are caused by the fact that very small apartments are relatively cheap to buy.

Over the last year the yields gap between Berlin and the other two cities has narrowed as rents have risen significantly in Frankfurt.  Berlin remains much less expensive, but in terms of rental return-on-investment, there is no longer much difference between Berlin and Frankfurt, while Munich´s yields are still a little lower.

All apartments included in the survey were located in the upscale residential neighbourhoods of Berlin, Frankfurt and Munich.

Round trip transaction costs are moderate to high in Germany.  See our Germany transaction costs analysis and our Residential property transaction costs in Romania compared to other countries.






Comments

#1 HUDA | April 17, 2010

please i want an apartment 120-200.sqm with minimum 3 rooms maximum 15 minutes walking to the center or 10 minutes by underground 3-4 stops.thanks

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