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Yes, the analysis of Bavaria's property market is included in our pack
Thinking of investing in real estate in Bavaria? You're not alone!
Many people are charmed by Bavaria's traditional culture and dream of owning a charming chalet or a historic countryside estate.
Would it be a profitable investment, though? Are property prices increasing in Bavaria? How much does it cost? Is it better to invest in Munich or Nuremberg? What are the property taxes? Can I get a very good rental yield? Where?
We know the answers.
The Investropa team has done their homework on this market. Actually, we have condensed all our findings in a pack. Get it now.
In this article, we're happy to share useful information with you.
How is the real estate market in Bavaria?
Is the property market doing well or poorly? Data will provide us with answers.
Types of properties
In Bavaria, you can find a variety of properties for sale.
These include charming traditional houses nestled in picturesque villages, modern apartments in bustling urban centers like Munich or Nuremberg, serene countryside homes with sprawling gardens, and even idyllic properties near beautiful lakes or the Alps, offering a range of choices to suit different preferences and lifestyles.
Buying vs Renting
(In case you want it for yourself, not for rental purposes)
If you're enchanted by the rich culture and stunning landscapes of Bavaria, Germany, you may be thinking about buying versus renting a property in this region.
Usually, buying is better than renting in Bavaria due to the relatively low property prices and the potential for long-term capital appreciation.
However, should flexibility be your priority, renting is the best option.
Housing prices in Bavaria
On average, according to the last data from Europace AG, Germany, purchasing a property in Bavaria would cost you around $5,700 per square meter.
Naturally, property prices are quite spread out. An apartment in Munich might have a different price per square meter than a house in Nuremberg. We actually give you a more detailed breakdown in our pack for buying property in Bavaria and in Germany.
To help you understand better, it is 3.3 times less than the property prices in the center of New York.
Also, housing prices in Bavaria are 12% cheaper than in Tyrol.
The most expensive places in Bavaria are probably Munich, Garmisch-Partenkirchen, and Starnberg, while the cheapest places are likely to be in rural areas.
Trends
First and foremost, we have to acknowledge that Germany is, today, an incredibly stable country. The last Fragile State Index that has been reported for this place is 23.6.
Don't forget about this when weighing the advantages and disadvantages of buying a property in Bavaria.
Also, according to the IMF’s forecasts, Germany's economy is expected to soar by 6% in the coming 5 years, resulting in an average GDP growth rate of 1.2%.
If you want to invest in real estate in Bavaria it's a good thing because a growing economy (usually) leads to higher incomes for citizens, enabling them to invest in real estate, which boosts demand and prices for properties.
Also, in Germany, the average GDP per capita has changed by 0.2% over the last 5 years. It's not much, but the growth is here.
Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in Germany right now.
Buying property in Bavaria
Buying real estate in Bavaria can be difficult due to the lack of reliable and updated information available about the process. That's why we have created the pack to buy property in Bavaria and in Germany.
Buying process
Inside our pack, we've outlined the complete buying process, including a detailed breakdown of prices and yields per area, tips for negotiating the price, and information about mortgage options.
Here, we're presenting you with a more straightforward version.
This is the step-by-step process to purchase a property in Bavaria:
- Define your budget and preferences.
- Engage a reputable real estate agent familiar with Bavaria's property market.
- Search for properties, considering regional regulations and local infrastructure.
- Visit and inspect shortlisted properties, considering Bavarian building codes and architectural styles.
- Obtain financing pre-approval from a German bank or lender.
- Make a written offer using the "Kaufvertrag" (purchase agreement) template, considering specific Bavarian property laws.
- Negotiate terms and price with the seller, adhering to Bavarian customs and legal requirements.
- Sign the Kaufvertrag, which must be done in the presence of a notary.
- Hire a notary who will handle the legal aspects and transfer of ownership.
- Transfer the purchase price to a secure escrow account, customary in Bavarian property transactions.
- Complete the notarization process, including verification of necessary documents like the "Grundbuchauszug" (land register extract).
- Take possession of the property and register your ownership with the local "Grundbuchamt" (land registry office) in Bavaria.
Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in Germany.
Make a profitable investment in Bavaria
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Where to find a property
Discover these websites to find properties in Bavaria.
- Engel & Völkers - A Munich-based real estate agency offering personalized advice for buying and selling exclusive properties.
- Rightmove - A property portal providing houses and apartments for sale and rent throughout Germany.
- Buy Berlin - Specialized in property sales and furnished rentals in Berlin, offering a variety of apartments in different neighborhoods.
- Rentola - A rental home search engine with over 13,000 available rental homes, offering price comparison and customer support.
- Deutsche Wohnen - A rental property platform by Deutsche Wohnen, providing apartments and commercial rental offers along with tenant support.
Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in Germany.
What you could get
As mentioned before, the average price per sqm in Bavaria is $5,700. A one-bedroom property (60 sqm) would cost around $342,000, and a two-bedroom (85 sqm) would be about $485,000.
However, as you can guess, property prices will differ based on the attributes of the property and its specific location.
High-end property locations in Bavaria often have higher property values. If you're eyeing a condominium in Munich, it could cost you approximately $650,000; however, a condominium in Garmisch-Partenkirchen might be priced at around $610,000.
Yet, there are places that won't cost you as much. You could find a house in Augsburg for $440,000 or a house in Regensburg that's only $360,000.
We give more details about property types and areas in our full pack for buying property in Germany.
Common pitfalls
Here are the main pitfalls when buying a property in Bavaria, Germany:
- Enzianzäune regulations: Bavaria has strict rules on property boundaries and fence heights, which may impact your property plans.
- Denkmalschutz restrictions: Historic preservation laws can limit renovations and alterations for protected properties.
- Grundsteuer concerns: Bavaria's property tax system differs from other states, affecting your ongoing costs.
- Almwirtschaft limitations: Buying an Alpine pasture property (Alm) may have specific usage restrictions.
- Länderübergreifender property rights: Border properties may involve complex ownership issues between states.
- Wassernutzungsrecht risks: Water usage rights regulations can affect properties near lakes, rivers, or springs.
- Oktoberfest proximity: Properties close to the festival grounds may face noise and disturbance during the event.
- Religious holidays: Local traditions and holidays may affect business hours and property transactions.
We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.
Everything you need to know is included in our Germany Property Pack
Living in Bavaria
Living in Bavaria is a great experience, offering a combination of beautiful nature, a strong economy, and a rich cultural heritage.
Cost of living
The cost of living in Bavaria is generally higher than the national average, but the quality of life is also high due to the abundance of cultural, recreational, and educational opportunities.
Here are some examples to better understand the cost of living in Bavaria, Germany:
- Rent for a one-bedroom apartment in the trendy "Glockenbachviertel" neighborhood of Munich: $1,400 per month.
- A meal at a traditional "Biergarten" with a "Brotzeit" platter: $20.
- Monthly public transportation pass in Munich (MVV): $90.
- Utilities (electricity, water) for a small apartment in "Schwabing": $110 per month.
- A Maß (liter) of "Helles" beer at Oktoberfest: $10.
- Entrance fee to the BMW Museum in Munich: $20.
- Monthly membership at a fitness studio in "Maxvorstadt": $60.
- A bottle of "Obstler," a Bavarian fruit brandy: $15.
Areas
Since we want to present information clearly, we've made a table that explains the different areas in Bavaria. For yields, prices and rents, check our property pack.
| Place | Description | Strengths | Weaknesses |
|---|---|---|---|
Munich | Munich is the capital and economic hub of Bavaria, offering a strong rental market and high demand for properties due to its vibrant economy and cultural attractions. | Strong local economy, high demand for rentals, and excellent infrastructure. | High property prices and competitive market. |
Nuremberg | Nuremberg is a historical city with a growing tech and manufacturing industry, providing good investment opportunities for both residential and commercial properties. | Booming tech and manufacturing sectors, rich history and tourist appeal. | Certain areas may have limited growth potential. |
Augsburg | Augsburg boasts a stable real estate market, and its proximity to Munich makes it an attractive option for investors looking for lower property prices. | Stable market, lower property prices compared to Munich, and good transport links. | Smaller market with fewer investment opportunities. |
Regensburg | Regensburg is a UNESCO World Heritage Site with a strong rental demand driven by its large student population and thriving tech industry. | Thriving tech industry, attractive historical setting, and high demand for student rentals. | Availability of suitable properties may be limited. |
Ingolstadt | Ingolstadt is a major industrial and research hub in Bavaria, offering a stable real estate market and opportunities in the automotive and technology sectors. | Strong industrial base, research institutions, and good rental demand. | Property prices can vary, depending on the location. |
Erlangen | Erlangen is a university town with a growing tech industry, making it a promising location for investors interested in the education and technology sectors. | University town, strong tech industry, and steady rental demand. | Limited availability of large-scale commercial properties. |
Bamberg | Bamberg is a charming city known for its well-preserved medieval architecture and a steady flow of tourists, providing opportunities for short-term rentals. | Historic charm, tourism potential, and cultural attractions. | Investment properties may be limited in the city center. |
Würzburg | Würzburg is a city with a strong focus on healthcare and life sciences, offering investment prospects in medical facilities and research-related properties. | Healthcare and life sciences industry, good transport links, and scenic location. | Limited market for certain property types. |
Freising | Freising is a town near Munich and the Munich Airport, making it attractive for investors seeking opportunities in logistics and aviation-related properties. | Proximity to Munich Airport, logistics potential, and historical appeal. | Limited commercial property options in certain sectors. |
Landshut | Landshut is a city with a well-preserved medieval center and a growing aerospace industry, offering diverse investment prospects. | Medieval charm, aerospace sector, and affordable property prices. | Market can be less liquid compared to larger cities. |
Life in Bavaria
Bavaria is one of the wealthiest and most economically powerful regions in Germany, with a diverse economy that includes automotive, engineering, IT, biotechnology, and tourism. Its capital, Munich, is home to many large companies and is a major hub for financial services.
What expats usually like the most about Bavaria are the beautiful landscapes, including the Bavarian Alps, and the abundance of outdoor activities, such as skiing, hiking, and biking.
Access to healthcare in Bavaria is generally good, with a well-developed public healthcare system and a wide range of private healthcare providers.
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Renting out in Bavaria
If you're considering purchasing property solely for renting and earning income, you'll find valuable information in this section.
Long-term
According to the data reported by Wikipedia, the home ownership rate in Germany is 49%, which is quite low.
Unlike major German cities where a significant number of residents opt to rent, in Bavaria, many individuals prefer purchasing property for their permanent residence.
If you decide to rent out long-term, you might want to target people who are looking for an affordable and convenient living option in Bavaria such as students, young professionals, and retirees.
Here is a little summary table we've made for you.
| Property type and area | Profiles of potential tenants | What they are looking for | Expected monthly rent in $ |
|---|---|---|---|
Apartment in Munich | Professionals, students | Central location, access to public transport | $800 - $2000 |
House in Nuremberg | Families, working professionals | Suburban living, good schools | $1000 - $2500 |
Studio in Augsburg | Singles, young professionals | Affordable urban living | $600 - $1500 |
Flat in Regensburg | Students, families | Historic city, university proximity | $700 - $1800 |
Now, you will probably ask us about the yields. Unlike for other places, it would be difficult to give you the average rental yields in Bavaria due to insufficient long-term rental properties available for analysis. Also, it's quite diverse. For example, rental yields in Munich and Nuremberg are quite different from those in smaller towns.
Finally, know that, in the Bavaria, the taxes stand around 10% of the total rental income (it's not much!).
Short-term
You could also decide to rent short-term to business travelers visiting the area for conferences or trade shows, or to tourists who want to explore the cultural and historical attractions of Bavaria.
If you decide to go with that option, look for properties in Munich, Nuremberg, and Regensburg, as these are the most popular cities in Bavaria for short-term rental properties. Additionally, the Bavarian Alps and Lake Constance are popular areas for tourists, making them attractive locations for short-term rental properties.
Is it worth buying real estate in Bavaria then?
Absolutely, buying a property in Bavaria is a fantastic idea for those who value long-term investments and a unique lifestyle. Bavaria's charm, stable economy, and projected GDP growth make it an enticing destination. If you're looking for a property to call home and immerse yourself in Bavaria's rich culture and breathtaking landscapes, this region offers an unparalleled experience.
Furthermore, the relatively lower property prices compared to major international cities make it an attractive option. If you have the means and are willing to commit for the long haul, Bavaria is a solid choice.
On the flip side, Bavaria may not be suitable for those seeking quick profits or flexibility. If you're in it for a short-term gain, Bavaria might not deliver the returns you desire. Additionally, the complex property regulations and varying rental yields, especially in smaller towns, could pose challenges for investors.
Lastly, if you're on a tight budget and looking for affordable options, some areas in Bavaria, especially Munich and its pricey counterparts, might be out of reach.
In summary, Bavaria is a dream destination for property investment if you're in it for the long run and crave a unique lifestyle. However, if you're after quick returns, flexibility, or affordability, you might want to explore other options.
Make sure you understand the real estate market in Bavaria
Don't rush into buying the wrong property in Germany. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.
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