The German real estate market and residential real estate in particular is still high in demand among local and overseas buyers. We are now in the 10 th year of strong performance in the German real estate market.
The question I frequently get asked, what are the best markets to buy property in Germany. This is not a simple question. It always depends on your very own situation and personal preferences. Germany is a big country with many unique opportunities in the real estate market. Hence it is important for you to write down your very own requirements and goals that you hope to achieve with your purchase in the German property market.
Since we have a good mix of readers of overseas buyers and expats living in Germany I thought to write about a systematic approach to find cities with a good outlook for real estate.
Now for those who don’t know Bulwiengesa, Bulwiengesa is an incredible data provider in the German real estate market. I can highly recommend everyone to read their publications. They provide enough data sets that are objective and rich in information.
In 2019 Bulwiengesa published a report called “ Die 5%-Studie” which you can access here:
Now since 2019 and 2020 rental yields have compressed even further, you will be still able to find deals with rental yields mentioned in the Bulwiengesa Report.
So with the intelligence of the report you have have a starting point to filter for those cities that are more or less in line with your own rental yield target.
After you have filtered through the report I would create a list of 10 cities that meet your rental yield target and are in proximity (50-100km) to one of the big 7 cities: Berlin, Frankfurt, Stuttgart, Cologne, Düsseldorf, Hamburg and Munich.
Once you have the list ready, you can start to search for real estate offers online or contact local agents to send you properties that are within your budget.
Pullach in Isartal
Bulwiengesa AG has divided the German property market into 4 classes according to functional importance for the international, national, regional or local real estate market.
Classification of the German real estate market by Bulwiengesa
Most important German centers with national and pinternational importance.
Big cities of national and regional importance
Important German cities with regional and limited national importance, with an important impact on the surrounding regions.
small, regionally focused locations with a central function for their immediate surroundings; low market volume and low sales volume
Examples of A, B, C and D cities in Germany
Berlin, Frankfurt, Düsseldorf, Stuttgart, Munich, Cologne and Hamburg
Bochum, Bonn, Bremen, Dortmund, Dresden, Duisburg, Essen, Hannover, Karslruhe, Leipzig, Mannheim, Münster, Nürnberg,Wiesbaden
Aachen, Augsburg, Bielefeld, Braunschweig, Darmstadt, Erfurt Erlangen, Freiburg, Heidelberg
Leverkusen, Neuss, Moers, Trier, Suhl, Pforzheim, Schweinfurt, Siegen, Sollingen, Passau, Oberhausen, Recklinghausen, Marburg