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May 31, 2016

Poor yields in Germany's big cities


Last Updated: May 31, 2016
BERLIN - Apartments COST (€) YIELD (p.a.) PRICE/SQ.M. (€)
TO BUY MONTHLY RENT TO BUY MONTHLY RENT
90 sq. m. 367,110 1,082 3.54% 4,079 12.02
120 sq. m. 598,920 1,493 2.99% 4,991 12.44
FRANKFURT - Apartments
60 sq. m. 245,760 794 3.88% 4,096 13.24
120 sq. m. 544,680 1,678 3.70% 4,539 13.98
MUNICH - Apartments
60 sq. m. 383,760 1,112 3.48% 6,396 18.54
120 sq. m. 942,360 2,243 2.86% 7,853 18.69
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

Prices of houses and apartments in Germany are rising.  Berlin is still much more affordable than Munich, but Germany´s capital city is now more expensive than its financial centre, Frankfurt.

  • Munich is Germany’s high-cost leader. To buy a 120 square metre (sq. m.) apartment in Munich costs around 940,000 euros
  • in Berlin a 120 sq. m. apartment costs around 600,000 euros
  • in Frankfurt, a 120 sq. m. apartment costs around 550,000 euros.

The purchase price of apartments in Munich´s prime residential districts is around 7,800 euros per sq. m., while in Berlin apartments cost around 4,900 euros per sq. m., and in Frankfurt around 4,500 euros per sq. m..

How much will you earn? Over the last two years, Frankfurt has moved into the lead in terms of rental return-on-investment.  Yields both in Munich and Berlin are a little lower than in Frankfurt.

  • In Munich a 120 sq. m. apartment can rent for around 2,250 euros a month, earning a yield of 2.9%.
  • in Berlin a 120 sq. m. apartment can rent for around 1,500 euros a month, earning a yield of 3.0%
  • in Frankfurt, a 120 sq. m. apartment can rent for around 1,700 euros a month, earning a yield of 3.7%.

These are not high yields.  All apartments included in the survey are located in the upscale residential neighbourhoods of Berlin, Frankfurt and Munich, and somewhat higher yields can be had on smaller apartments in poorer neighbourhoods.

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.

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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