Buying real estate in Frankfurt

property in Frankfurt
Updated 2022-11-03 05:09

Frankfurt has a very lively real estate market, and buying a house there is, without a doubt, a worthy long-term investment. Frankfurt is a city of contradictions, where the opulence of the financial district and areas of displaced people are just a few streets away from each other. This diversity and unique character make Frankfurt one of the most attractive destinations in Europe.

Besides being one of Europe's largest financial centers, Frankfurt is an international transportation hub and a city that knows how to have fun. In this article, you will get a glance at the city's real estate market to help you decide whether a property in Frankfurt is the right investment for you. Property prices in Frankfurt are already relatively high, with a tendency to rise due to the considerable international interest in the city. Here, it's worth mentioning that non-citizens can buy property in Germany; however, the purchase and investment do not entitle them to German citizenship.

The real estate market in Frankfurt

The city of Frankfurt has been among Europe's most preferred places for professional expats, mainly due to the city's stable economy and lively financial sector, offering many job opportunities. Over the past years, and due to Brexit, more than 25 banks have chosen to move their main operations from London to Frankfurt. This has led many to believe that after Brexit, Frankfurt might be the best place for the relocation of many expat professionals specialized in the financial sector. As a consequence, property and rent prices are rising, especially in the central areas within the inner city (Innenstadt). 

Homes in the desired neighborhoods, such as the Diplomat Quarter or Sachsenhausen, cost around 7,000 to 9,000 euros per square meter. These prices are expected to grow, following the example of the past ten years of growth. The local real estate market is still dominated by German buyers (mostly wealthy elderly couples). Nevertheless, many international people, including young professionals and investors from Europe, China, and the Middle East, are more and more interested in buying a house or an apartment in Frankfurt. Overall, finding housing to buy in Frankfurt takes time and dedicated research, but it can become one of the most fruitful investments one has ever made. 

Choosing your neighborhood in Frankfurt

We have a dedicated article to some of the most sought-after neighborhoods in Frankfurt to buy property, but here's an overview. Sachsenhausen (sometimes divided into north and south) features villas, houses, and houses with vast gardens. It is full of beautiful green areas and is close to the main cultural centers of the city. Sachsenhausen is one of the largest districts of the city and is quiet and vibrant at the same time, as it has many bars and Apfelwein houses located on the Schweizer Straße. Properties' prices start at 6,300 euros per square meter.

The Diplomatic Quarter (or Diplomatenviertel) is part of Bockenheim and is one of the most important parts of the city, offering high-end housing. In this area, which is close to Johann Wolfgang Goethe University and Messe Frankfurt, you will find many of the world's consulates and expensive condominiums. Here, prices start from 7,600 per square meter. Europaviertel is a new part of the city, between Messe Frankfurt and Hauptbahnhof and Platz der Einheit and Rebstockgelände. This large neighborhood development project includes offices, hotels, apartments, schools, and parks. Additionally, a metro station will be built to serve the area and its ten thousand people. Property in this area costs around 9,000 euros per square meter.

Conditions for buying property in Frankfurt

Expats have no restrictions on buying a house in Frankfurt, and the only requirement is a German bank account. Unlike Germans (who don't even have the word mortgage in their dictionary), interested expat investors can get a loan, but its value cannot be more than half of the price of the housing. Overall, it is wise to do your research and check with different banks before committing to a loan, as each bank offers different interest rates, which range from 0.61 percent to 2,78 percent, but also depend on the contract and its length (e.g., 10 years, 20 years, or less). 

Choosing a property usually depends on factors such as the neighborhood, the size of the property, its storage space, garage, etc. Most of the properties in Frankfurt are well-built with good-quality materials since the area is prone to seismic activities. Houses are usually sold unfurnished. 

If a house's sale is facilitated by a real estate agent, in most cases, it is the buyer who pays the commission. Transfer taxes on real estate transactions vary from one German state to another. Some buyers decide to hire a lawyer, and while this is not obligatory, it can be helpful. The lawyer can also help you check all the details of the contract (e.g., terms of payment, conditions, etc.) before signing. All the transactions have to be done by a notary, whose fee is around 1,5 percent.

Good to know: 

Many people choose to buy property in Frankfurt, believing that renting it can pay off or that a property can be sold at a higher price afterwards. However, this might not be the best approach. The city is in constant development, and in case prices go up, the government can choose new areas for building for better control over property prices.

We do our best to provide accurate and up to date information. However, if you have noticed any inaccuracies in this article, please let us know in the comments section below.