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Everything you need to know before buying real estate is included in our Germany Property Pack
Germany and Austria both offer compelling property investment opportunities, but they differ significantly across pricing, regulations, and market dynamics.
Germany provides greater accessibility for foreign investors with no nationality restrictions and strong liquidity in major cities, while Austria offers exceptional quality of life and market stability but imposes stricter rules for non-EU buyers. Property prices average €4,161 per square meter in Germany versus €4,375-€5,900 in Austria, with rental yields ranging from 2.3-5.0% in German cities compared to 4.0-6.0% in Austrian markets.
If you want to go deeper, you can check our pack of documents related to the real estate market in Germany, based on reliable facts and data, not opinions or rumors.
Germany offers better accessibility for foreign investors with no nationality restrictions and superior liquidity in urban markets, while Austria provides outstanding quality of life and market stability.
Both countries feature similar transaction costs (10-15%) and tenant-friendly regulations, but Germany has slightly lower property prices and better financing options for non-EU buyers.
| Factor | Germany | Austria |
|---|---|---|
| Average Price per sqm | €4,161 (existing: €3,403; new: €5,478) | Houses: €4,375; Apartments: €5,900 |
| Foreign Buyer Restrictions | None for any nationality | EU: None; Non-EU: Strict provincial permits |
| Rental Yields (Major Cities) | 2.3-5.0% depending on city | 4.0-6.0% (Vienna strongest) |
| Mortgage Rates (2025) | 3.6-3.7% | 3.3-3.4% |
| Transaction Costs | 10-12% total | 10-15% total |
| Market Liquidity | Excellent in major cities | Strong in Vienna, moderate elsewhere |
| Quality of Life | Excellent infrastructure, diverse employment | Outstanding in Vienna (top global rankings) |
How much do properties cost per square meter in Germany compared to Austria?
Germany averages €4,161 per square meter nationally, while Austria ranges from €4,375 for houses to €5,900 for apartments.
In Germany, existing apartments average €3,403 per square meter while new builds reach €5,478 per square meter. Munich leads German cities at €8,476 per square meter, whereas eastern German cities start as low as €1,000-€2,000 per square meter.
Austria shows higher apartment prices at €5,900 per square meter nationally, with Vienna averaging €5,119 per square meter for apartments. Alpine regions like Tyrol and Salzburg command premium prices exceeding €12,000 per square meter for luxury properties, significantly above German equivalents.
German property prices offer better value in secondary cities, while Austria concentrates higher prices in Vienna and tourist destinations. As of September 2025, both markets show price stability after recent corrections.
What are the property taxes, annual fees, and hidden costs in each country?
Both countries impose similar total transaction costs of 10-15%, but Austria generally runs higher due to additional municipal fees.
| Cost Type | Germany | Austria |
|---|---|---|
| Annual Property Tax | 0.26-1% of assessed value | 0.1-1% of assessed value |
| Transfer Tax | 3.5-6.5% (varies by state) | 3.5% plus 1.1% registration |
| Municipal Fees | €200-€600 annually | Varies by municipality |
| Notary & Legal | 1.5-2% of purchase price | 1.5-2.5% of purchase price |
| Real Estate Agent | 3-7% (split buyer/seller) | 3-4% (typically seller pays) |
| Total Transaction Costs | 10-12% of purchase price | 10-15% of purchase price |
How easy is it for foreigners to buy property in Germany versus Austria?
Germany imposes no nationality restrictions, allowing both EU and non-EU buyers identical purchasing rights as locals.
The German process requires stringent documentation, proof of funds, and transparency reporting, but applies these requirements equally to all buyers regardless of nationality. Foreign investors face the same legal framework and can purchase any type of residential property without special permits.
Austria distinguishes sharply between EU and non-EU buyers. EU, EEA, and Swiss citizens enjoy full purchasing rights equivalent to Austrian nationals. Non-EU buyers encounter strict provincial restrictions requiring special permits, with some regions completely off-limits to foreign ownership.
Vienna and Graz remain the most accessible Austrian cities for non-EU buyers, while Alpine provinces impose the strictest limitations. Austrian banks also require higher down payments from foreign applicants, particularly non-EU nationals.
It's something we develop in our Germany property pack.
What rental yields can I realistically expect in the main cities of both countries?
German cities deliver rental yields between 2.3-5.0%, with Berlin and Leipzig offering the strongest returns at 4.5-5.0%.
Munich yields just 2.3-2.7% due to extremely high property prices, while Frankfurt provides 2.5-3.0% yields despite strong rental demand. Leipzig stands out among German cities with 4.0-5.0% yields thanks to affordable entry prices and rising rents.
Austrian yields concentrate around 4.0-6.0% in Vienna, making it more attractive than expensive German cities. Vienna's rental market benefits from low homeownership rates and steady demand from international organizations and students.
Alpine Austrian regions often deliver lower yields due to seasonal rental patterns and high purchase prices. German secondary cities generally outperform Austrian tourist destinations for consistent rental income.
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How strong and stable are the real estate markets historically in Germany compared to Austria?
Both markets demonstrate exceptional stability, with Austria slightly outpacing Germany in historical price appreciation.
German property prices increased 96% from 2005-2023, showing consistent growth supported by economic fundamentals and persistent housing shortages. The German market rebounded strongly post-pandemic and maintains moderate positive growth despite recent interest rate increases.
Austria achieved 163% price growth over the same 2005-2023 period, outpacing both EU averages and Germany. The Austrian market benefits from extremely low volatility and steady demand driven by tourism, international organizations, and limited housing supply.
Recent market conditions show Austria experiencing some price corrections in 2024-2025 after years of rapid increases, while Germany maintains steadier growth patterns. Both markets prove resilient against economic shocks due to strong underlying demand and limited new construction.
What are the current mortgage interest rates and financing conditions in both places?
Austria offers slightly lower mortgage rates at 3.3-3.4% compared to Germany's 3.6-3.7% as of September 2025.
German lenders typically require 20-40% down payments from foreign buyers, with maximum loan-to-value ratios of 50-70% depending on nationality and income verification. Mortgage terms extend up to 30-35 years with relatively straightforward approval processes for documented income.
Austrian financing proves more favorable for EU citizens with 20-50% down payment requirements and loan-to-value ratios reaching 50-80%. Non-EU buyers face higher scrutiny and larger down payment requirements, often exceeding 50% of purchase price.
Both countries offer 35-year maximum mortgage terms, but Austrian banks provide better conditions for EU citizens while German banks treat all foreign buyers more uniformly. Current market conditions favor Austrian rates due to ECB monetary policy.
How strict are the regulations for landlords in Germany versus Austria?
Both countries implement strict tenant protection laws that significantly favor renters over landlords.
German regulations include lengthy eviction processes, strict limits on rent increases, security deposit caps, and detailed requirements for property improvements and repairs. Landlords face extensive documentation requirements and limited flexibility in lease terminations.
Austrian tenant laws prove equally restrictive with capped rent increases, regulated security deposits, long minimum notice periods, and some rent control mechanisms particularly in Vienna's municipal housing sector. Vienna's social housing policies create additional regulatory complexity.
Both markets require landlords to navigate bureaucratic processes for any significant changes to rental agreements or property improvements. These regulations protect tenants but reduce landlord flexibility and potential returns compared to more landlord-friendly markets.
What are the long-term growth prospects for property values in each market?
Germany forecasts steady appreciation over coming decades, especially in urban centers facing continued population growth and supply constraints.
German property markets benefit from robust economic fundamentals, ongoing housing shortages, and demographic trends favoring urban concentration. Short-term corrections may occur, but underlying demand from both domestic and international buyers supports long-term value growth.
Austrian property values show historically robust performance but recent years indicate plateauing growth after exceptional increases. The market's resilience stems from low homeownership rates, steady tourism demand, and consistent international interest in Vienna.
Austria proves less susceptible to boom-bust cycles due to conservative lending practices and steady demand patterns. Both markets face similar challenges from construction costs and regulatory constraints limiting new supply.
It's something we develop in our Germany property pack.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Germany versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
How do living costs and quality of life compare if I plan to actually live in the property?
Austria delivers superior quality of life rankings, particularly in Vienna, while Germany offers slightly lower living costs and more diverse employment opportunities.
German cities provide excellent healthcare, infrastructure, and public services with larger international expat communities in major centers like Berlin, Munich, and Frankfurt. Living costs vary significantly by city, with eastern German cities offering substantially lower expenses than Munich or Frankfurt.
Austria consistently ranks among the world's top countries for quality of life, with Vienna frequently achieving top global rankings for livability. Austrian cities excel in urban safety, public transportation, cultural offerings, and environmental quality.
Austrian living costs run modestly higher than Germany, especially in tourist regions and Vienna, but generous public services offset these expenses. Both countries provide excellent work-life balance and social benefits for residents.
Which locations in Germany and Austria attract the most international demand and why?
Munich, Berlin, and Frankfurt lead German international demand due to strong job markets and corporate presence, while Vienna dominates Austrian international interest.
- Munich: Attracts international buyers for its economic strength, proximity to Alps, and high-quality lifestyle despite premium pricing
- Berlin: Appeals to young professionals and investors seeking cultural vibrancy and relative affordability among major German cities
- Frankfurt: Draws financial sector professionals and international corporations due to its banking center status
- Vienna: Dominates Austrian demand with its EU headquarters status, cultural offerings, and exceptional quality of life rankings
- Salzburg: Attracts luxury buyers and tourism investors for its UNESCO World Heritage status and Alpine proximity
What are the transaction costs when buying and selling property in each country?
Both countries impose similar total transaction costs of 10-15%, but Austria typically runs higher due to additional fees and registration requirements.
German buying costs include 3.5-6.5% transfer tax varying by state, 1.5-2% notary fees, and 3-7% real estate agent commissions often split between buyer and seller. Total buying costs reach 10-12% of purchase price.
Austrian buyers face 3.5% transfer tax plus 1.1% registration fees, 1.5-2.5% notary costs, and 3-4% agent fees typically paid by sellers. Total Austrian buying costs range 10-15% of purchase price.
Selling costs remain lower in both countries at 0-3% including potential agent fees and capital gains taxes for non-residents. German capital gains taxes apply only to properties held less than 10 years, while Austria imposes similar short-term holding period taxes.
How does the ease of resale and liquidity of property compare between Germany and Austria?
German urban properties offer exceptional liquidity with deep resale markets, while Austrian liquidity concentrates primarily in Vienna.
German major cities including Berlin, Munich, Frankfurt, and Hamburg maintain highly liquid property markets with strong buyer demand and quick transaction times. Rural German properties show significantly lower liquidity with longer marketing periods.
Vienna provides Austria's most liquid real estate market with consistent buyer interest and reasonable transaction timeframes. Austrian Alpine tourist markets experience seasonal liquidity patterns that can slow sales outside peak demand periods.
German secondary cities generally offer better liquidity than equivalent Austrian locations outside Vienna. Both countries' rural properties require longer marketing periods and potentially lower sale prices compared to urban centers.
It's something we develop in our Germany property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Germany offers superior accessibility for foreign investors with no nationality restrictions and excellent liquidity in major cities, making it ideal for international buyers seeking straightforward property investment.
Austria provides exceptional quality of life and market stability but requires more careful navigation of foreign buyer restrictions, particularly for non-EU nationals, while offering competitive rental yields in Vienna.
Sources
- Average House Prices in Germany
- Germany Property Price Forecasts
- Average House Prices in Austria
- Austrian Statistics Office Property Prices
- Austria Square Meter Prices
- European Property Taxes
- German Property Tax Guide
- Austrian Tax Summary
- Foreign Investment in German Real Estate
- Foreign Investment in Austrian Real Estate