The property symbolizes a Munich phenomenon: with 125 square meters of living space, the mid-terrace house in the Waldperlach district, built in 2011, is ideally suited for an average family. The purchase price, however, is beyond the budget of the Otto normal family. Including ancillary purchase costs, the house should cost a good 1.3 million euros.
For many, owning a home remains just a dream. Real estate prices have exploded all over Germany. And many homebuyers are quick to strike now that interest rates are cheap. It.
Quite a few desperate property buyers are therefore fleeing to the surrounding area. They hope to find affordable property in the suburbs of the expensive metropolises. There too, however. Absolutely, however, buyers are still getting cheaper there.
The brokerage company McMakler has investigated where buyers still have good chances of getting affordable property – and how much competition they can expect there. For this purpose, it evaluated the advertisements of various real estate portals in the period from May 2020 to August 2021. “Our data clearly show that prospective buyers are increasingly turning to the suburbs of the metropolises,” says McMakler boss Felix Jahn. “In four of the seven largest German cities, demand in the surrounding area is now higher – and prices are clearly rising.”
Just like in Munich: with an average price per square meter of almost 8,500 euros, the Bavarian capital is still the most expensive pavement in Germany. According to McMakler’s data, when buying a property in the suburbs instead of in the city, a good fifth of the purchase price can be saved (at around 7,000 euros per square meter).
The expensive prices in Munich are driving more and more home buyers into the surrounding area. The demand increases accordingly. 63 potential buyers apply for each property in the bacon belt. In Munich itself, on the other hand, there are only 48. It is therefore to be expected that prices in the Munich area will increasingly approach those in the city.
The situation is similar in the Rhine metropolises of Cologne and Düsseldorf. There, too, more people apply for real estate in the surrounding area than in the city itself. With price differences of 26 percent (Cologne) and 29 percent (Düsseldorf), you can save even more percentages here by moving to the suburbs than in Munich.
The price per square meter in the federal capital Berlin is a little more expensive. Here, too, home buyers in the suburbs save a lot of money – on average, it is 26 percent when they buy a property outside of the city. The capital city’s problem, according to McMakler boss Jahn, can be found in the bacon belt: “Elsewhere, when there is high competition in the city, buyers can switch to the real estate market in the bacon belt, but not in Berlin.” In the entire Berlin-Brandenburg metropolitan region the real estate market would be under pressure. Both in the city and in the surrounding area there is a lot of competition with 64 and 65 applicants per property, respectively. The search for the right property is correspondingly difficult.
The competition is toughest in Hamburg. In the port city, an average of 67 applicants are trying to get a house or a condominium. In contrast, there are only 54 in the suburbs. In Frankfurt, too, more people prefer to live in the city than in the surrounding area (60 or 50 applicants per property). This is where the price differences between the city and the suburbs are also the smallest. A property outside the banking metropolis is on average just 14 percent cheaper.
Experts anticipate that the trend towards life in the bacon belt will continue to increase. Because many employees work more in the home office and no longer have to commute five days a week, many are also likely to take longer commutes. The increasing demand for real estate in the surrounding area should lead to a further convergence of the surrounding area prices with those of the big cities.
McMakler boss Jahn therefore says: “In order to counteract the existing housing shortage and relieve the conurbations, the new construction and the expansion of the infrastructure in the surrounding area of the metropolises must be promoted. That would significantly equalize the demand pressure and help ease purchase prices. “
Real estate prices continue to rise, supply is scarce, and credit is still cheap. But the dream of owning a home can only come true if buyers finance wisely and avoid common mistakes. .