Buying property in Frankfurt

property in Frankfurt
Updated 2019-10-09 13:43

Frankfurt is a liberal, democratic and financial city located in the strategic centre of Europe. It is a place of contrasts, as it hosts bankers and beggars in just a few streets of distance. It is without a doubt one of the most attractive places in Europe, earning many nicknames like Bankfurt or Mainhattan. Being one of the largest financial centres in Europe, and one of the first landing cities when flying to Europe makes it an attractive real estate market. In addition to the green spaces and the pleasant nature, it is an interesting spot for people who would like to retire in a large city and for families.

Foreigners can buy a property in Germany; however, it does not entitle them for a residence permit. To decide if buying a house in Frankfurt is worth it, it is essential to get a glance at the city's real estate market. Property prices in Frankfurt are quite high and tend to rise due to the considerable international interest in the city. While for some, this can seem challenging, others see it as a life goal.

The real estate market in Frankfurt

The city hosts a large number of foreigners every year as its attractivity increases, especially for workers in the financial sector. Over the past years, 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 place for relocation. As a consequence, property and rent prices are rising, especially in the central areas. Homes in the desired neighbourhoods, like 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 mostly dominated by German buyers (mostly wealthy older couples). However, many foreign people like young professionals and investors from Europe, China and the Middle East are more and more interested in buying a house or an apartment in the city. So overall, finding housing in Frankfurt takes time and dedicated research, as for the right individuals, it may be an expensive but a fruitful investment.

Choosing your neighbourhood in Frankfurt

The following are some of the most sought after neighbourhoods in Frankfurt:

  • Sachsenhausen (Sometimes divided in North and South) is an area that features villas, houses, and gardens. It is full of beautiful green areas and is close to the main cultural centres of the city. Sachsenhausen is one of the largest districts of the city and is quiet and vibrant and the same time. It is mostly famous for its bars and Apfelwein houses (located on the Schweizer Straße). Properties cost from 6,300 euros per square meter.
  • Diplomatic quarter (or Diplomatenviertel) is part of Bockenheim, and is one of the most important parts of the city, offering high-class housings, consulates and expensive condominiums. This area is close to the Johann Wolfgang Goethe University and Messe Frankfurt, where most of the fairs are hosted. The prices go from 7,600 per square meter.
  • Europaviertel is a new part of the city which is being built and expected to be finished by 2024. This project is developing offices, hotels, apartments, schools and parks. Additionally, a metro station is arriving, and the whole area is expected to host 8,000 to 10,000 people. Property in this area costs around 9,000 euros per square meter.

Conditions to be met for buying property in Frankfurt

Foreign nationals have no restrictions on buying a house in Germany, and the only requirement is to have a German bank account. Unlike the Germans (who don't even have the word mortgage in their dictionary), interested foreigners can get it, but no more than half of the price of the housing. Choosing a property usually depends on factors like the neighbourhood, the size, 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, and sometimes they only have a kitchen and a toilette installed. It is always important to carefully check the whole house and the details of the contract (if the names are correct, the terms of payment and the conditions in case one of the parties dialed) before signing. All the transactions have to be done by a notary, whose fee would be around 1,5 per cent.

 Good to know:

The buyer usually pays the commission for the real estate agent.

Transfer taxes on real estate transactions vary in different states. Some buyers decide to hire a lawyer, and while this is not obligatory, it can be helpful to stay on the safe side.

In case of a mortgage, one important thing is to check for rates, and not to accept immediately. It is also necessary to carefully analyse your personal financial situation. Interest rates range from 0.61 per cent to 2,78 per cent, but they also depend on the contract and the duration. Usually, mortgages last for 10 or 20 years, but they can be longer or shorter.

 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 on 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.