With interactive graphics: This map shows where it is worth buying – and where it is better to rent
Anyone who buys an apartment remains rent-free after the loan has been repaid. However, sometimes it can still be more expensive than renting. We analyzed all 401 cities and districts in Germany to show what is economically better and where it is better.
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Munich currently has by far the highest rents in Germany – and yet it is cheaper for you to rent here for life than to buy an apartment. What seems absurd is made clear by our calculations for all 401 regions of Germany. If you rent an average-sized condominium in Germany today – it will be 92 square meters – it will cost you 19.16 euros per square meter (including rent), i.e. a total of 1762 euros per month. Assuming that you have lived there for at least 40 years and that the rents are rising sharply every year, as in previous years, you will be asking a total rent of 1.1 million euros by 2062.
On the other hand, there is the possibility of buying just a single apartment. According to today’s square meter prices, you have to pay around 992,500 euros for this, which includes ancillary costs such as real estate transfer tax, brokerage commission and notary. In addition, there are interest costs for the next 40 years. Even if we assume that March interest rates remain at an average level of 1.55 percent per year for four decades, that’s another 502,000 euros. In total, you pay around 1.5 million euros to buy an apartment in Munich – and even if you pay a monthly rate of 1,500 euros, you still haven’t paid for the apartment. In addition, there are maintenance costs for any repairs and additional costs that you as a tenant will not have to bear.
Real estate: North Friesland offers tenants the greatest advantages
The tenant saves over 400,000 euros over the next 40 years compared to the buyer. This also applies to 48 other regions in Germany. Munich is not even at the top when it comes to purely financial advantages for tenants. To the north lies Friesland, although the district average here is somewhat distorted by the luxury island of Sylt. Nevertheless, tenants only pay 8.08 euros per square meter here, which is only slightly above the national average. Buyers have to pay 7,977 euros per square meter, which is almost three times the national average.
Calculated over 40 years, this results in an enormous advantage for the tenants. They pay a total of 464,132 euros in rent for the 92 square meter apartment, while homebuyers including interest and maintenance costs are already 1.3 million euros poor by 2062 and have still not paid off the loan. The difference of around 850,000 euros is also reinforced by the fact that tenants can invest a difference of 1,500 euros per month to house buyers. With a return of only 3 percent per year, your financial gain increases to 1.3 million euros after 40 years.
This is the highest price in the country to date. The district of Aurich in Lower Saxony took second place with a profit of 696,000 euros for tenants. But Aurich also includes popular islands such as Joest, Norderney and Baltrum, which have significantly higher real estate prices. Third place goes to the district of Rostock, where after 40 years more than 674,000 euros are in the pockets of the tenants. The Mecklenburg-Western Pomerania region includes some popular bathing resorts on the Baltic Sea.
Overall, tenants aged 40 and over have an advantage in 49 of the 401 German cities and districts. In particular, these are sectors in which purchase prices are above the national average. These include Hamburg, Düsseldorf, Frankfurt, Munich and Berlin, five of the country’s seven largest cities. Also, you should rent rather than buy in most coastal areas. They also have an advantage in the Munich and Berlin area.
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Buying is the better option in most areas
It is recommended to buy it in all other cities and counties. This is especially true if the purchase price is very low. You have the greatest advantage as a buyer in the Thuringian district of Hildberghausen. Here you have around 540,000 euros more in your account in 2062 than a tenant. This is mainly due to the fact that you pay off the home loan here with a monthly rate of 1500 euros so quickly that you can invest the money later. Since an apartment with 92 square meters including ancillary costs and interest in Hildberghausen only costs 110,000 euros, it is amortized after five years and you can invest the money profitably for 35 years.
This effect also occurs in all areas where low purchase prices or relatively high rental prices prevail. This applies, for example, to Stuttgart, Heidelberg and Freiburg in Baden-Württemberg and Rosenheim in Bavaria. Salzgitter in Lower Saxony, Gelsenkirchen and Hagen in North Rhine-Westphalia and Chemnitz in Saxony are among the major cities in which buyers benefit particularly from low home prices.
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that’s what we calculated
For the rental prices, we have assumed that you are renting an average condominium in Germany with a size of 92 square meters. Average cold rates are from Postbank Vonatales 2022 and extrapolated over the next 40 years, giving you a 1.3 percent annual rent increase. This corresponds to the national average for the last ten years.
For the purchase prices, we have assumed that you are buying the same sample apartment at average square meter prices in the relevant area – also taken from the Postbank Wohnatlas 2022. Property transfer taxes incurred, average brokerage fees, notary and other ancillary costs The costs in the respective federal state were also taken into account. When it comes to financing, we are assuming 10 percent equity over the next 40 years, a monthly rate of 1,500 euros and a fixed interest rate of 1.55 percent per year. This corresponds to the average pair financing. In addition, there are maintenance costs of 22 euros per square meter and month.
It also assumes that tenants paying less than $1,500 a month will invest the differential return of 3 percent a year and do the same once the buyer has paid off their home. We have not taken into account ancillary rental costs, as these are to be borne by both the tenant and the buyer.
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