How to buy a property in Germany

To be able to buy a property in Germany you must be extremely well prepared. The real estate market is currently in the seller market, which means that the seller has a better market position than the buyer due to the high demand. For a house purchase in Germany to succeed, you have to consider the following.

First of all, and this is the most important point, is financing. To improve creditworthiness, you need to raise a high level of equity. That’s why it’s important to start saving early. Only when you have saved enough money, you can ask the bank for a loan. In order to get a loan from one, some requirements apply. On the one hand, you must have reached the age of 18, on the other hand, you must be able to prove that you have a German residence. Furthermore, the conditions apply that you may not have any debt entries and should have a sufficient regular income. In the price calculation step, the ancillary costs should not be ignored. These usually amount to an additional …

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History of the Landesbank (Bavaria)

In Germany, Landesbanken are credit institutions that carry out banking transactions for individual federal states and support the state in promoting the economy.

The history of the legal predecessors of today’s Landesbanken often dates back to the 18th century. In their now familiar form, the banks emerged in the years after World War II, when the German states issued their first state bonds with the help of the Landesbanken. In the respective federal state for which they carry out banking transactions and act in an advisory capacity, they perform a kind of house bank function. In addition, the Landesbanken are authorized to conduct all banking transactions permitted under their statutes. In this respect, they have been operating on the market for years as general commercial or universal banks.

The business model of the Landesbanken has faced a dilemma since the abolition of institutional burden and guarantor liability in 2005; on the one hand, they conduct banking business for their federal state, but on the other hand, they are on a par with private banks and have to hold their own …

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European mortgages explained: Switzerland

Mortgages in Switzerland have a basic, straightforward idea but are subject to rather strict lending rules. Banks are currently using a 4.5% theoretical interest rate as a reference. Some are even using a 5% sample rate. On top of that, they are accounting for 1% amortization per year. And depending on the bank, they will account for between 0.5% and 1% in maintenance costs. Furthermore, the cost of the chosen property can’t be higher than 33% of the income. So the 5% of the mortgage needs to be smaller than 33% of the income. In general, the mortgage will be 80% of the house value.

If you live in Switzerland with a residency permit B or permit C, you can apply for a mortgage and buy a property in Switzerland. If you don’t have residency, it’s slightly more complicated. Under the Lex Koller law – which limits purchases of Swiss property by foreigners – non-residents must apply for a license to buy from their cantonal authority.

There are a few additional costs when buying a Swiss home. These generally equate …

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European mortgages explained: Germany

There are many particularities regarding mortgages in Germany.

Several requirements need to be fulfilled to qualify; they differ from employees to self-employed and freelancers. Unfortunately, each lender has its own set of criteria which makes qualification a difficult process. But there are general guidelines and specific required documents. These documents have to be provided to the lender in German language.

German self-disclosure questionnaire property assessment proof of employment (2–12 months of payslips) freelancers must provide additional proof of income and net worth including two years of balance sheets, business, and economic evaluation, and prior year’s tax returns latest tax returns proof of available equity to cover the purchase fees Extract from the Land Register for the previous six weeks

In addition, foreign buyers will need to provide copies of their passports and, in some cases, a residency permit. Of importance is also the disposable income which is calculated by taking the monthly net income and deducting all recurring fixed costs, like insurance, rent, etc. For average incomes, a general rule of thumb is that the mortgage monthly payments cannot exceed …

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The economy of Nuremberg

Nuremberg is the second-largest city in Bavaria after Munich. According to the population register in December 2021 530,222 people had a registered main residence in Nuremberg. Within the last two Corona years, Nuremberg’s population has thus declined by 1.1%. The main reason for this is the Corona pandemic. Since October 2021, the number of inhabitants has been increasing significantly again. According to the Nuremberg and Fürth Statistical Information System, about 32.000 people moved away from Nuremberg in the year 2021.

Nuremberg was ranked among the top 25 cities with the best quality of life worldwide in a study (Worldwide Quality of Living Survey) conducted by the consulting firm Mercer, and was ranked sixth among German cities in 2010.

The overall quality of living and satisfaction of the population is continually determined every three years in most German cities. The last survey took place in 2019 with over 1,000 participants. More than 80% of all attendees from Nuremberg were satisfied with the public areas such as markets, squares, and pedestrian zones in their city. The condition of roads and buildings as …

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Nuremburg property market

Nuremberg isn’t known as a significant real estate location even though it has been the economic and cultural centre of Northern Bavaria for years. But lower prices than in more prominent German cities, make buying property in Nuremberg a good investment.

The property market is growing steadily which can be seen in a renewed high level of real estate transaction volume in 2021. At EUR 1.39 billion, the sales volume was indeed about a tenth below the previous year’s figure, but it was still slightly above the average of the last five years. The top position was taken by the segment of institutional housing with a generated transaction volume of around EUR 525 million. The surpassing of last year’s figure by +6% is an indicator to a continuing interest in residential investments in Nuremberg.

The office segment showed a contradictory development in 2021 with only EUR 286 million or 61% less than the previous year due to a lack of opportunities.  Since there were no large-volume sales (above EUR 100 million) observed the highest office transaction amounted to almost EUR …

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The Frankfurt property market (Germany)

Frankfurt am Main is growing – as a stable business location, internationally important financial centre and European transportation hub. The largest city in Hesse attracts numerous young workers, older financially strong couples, but also foreign customers. For several years now, Frankfurt am Main has been one of the cities in Germany with the highest population growth. Since 2014, the number of inhabitants has risen by 7.1 per cent to almost 760,000. Given their economic importance, mass migration and associated housing demand are unlikely to decline in the foreseeable future.

Frankfurt am Main is also one of the nationwide leaders when it comes to vacancy rates for residential properties. The Main metropolis has a vacancy rate of only 0. 3 per cent, which is ahead of the already low figures in Stuttgart (0. 5 %), Hamburg (0. 5 %) and Berlin (0. 8 %). The continuing excess demand for housing in Frankfurt am Main has led to a steady rise in the average rent in the Main metropolis for years. However, a distinction must be made here between existing …

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German mortgages explained

In the legal sense, a mortgage is the right with which a bank or building society secures a mortgage loan. The mortgage secures a plot of land with or without buildings. It is one of the liens on real property and is regulated in the German Civil Code (Section 1113 BGB).

If the builder fails to meet his obligations under the loan agreement, the bank can apply for foreclosure. It can use the proceeds from this to repay the construction loan. Usually, you can only cover a part of the purchase price of your desired property with your own funds. The greater part is financed by a mortgage. This means a loan from a bank, which is secured by the property. How to get a mortgage in Germany

Let your customer advisor advise you on all aspects of real estate purchase. There are various contact points in Germany for this purpose. Depending on your life situation, it is appropriate to first contact the house bank. Various financing proposals are measured by how good the customer’s liquidity is.

After the financing …

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The economy of Frankfurt

Frankfurt is known as a commercially oriented city that has made trade fairs and congress epicenters home in the most populous city in Hesse.

As Germany’s financial capital, a large number of banks and brokerage houses have their headquarters there. Among them, one counts, for example, the Deutsche Bank, Dresdner Bank, Commerzbank, and even the European Central Bank, which is responsible for the monetary policy of the eurozone and the Deutsche Bundesbank.

Characteristics such as economy, traffic, and trade fairs characterize Frankfurt. With the trading platforms Frankfurter stock exchange and XETRA operated by Deutsche Börse AG, Frankfurt is the second-largest stock market in Europe and handles the lion’s share of German securities trading.

Despite high-income inequality, with a Gini coefficient of 44, this metropolis’ labor productivity advantage translates into an average household income of USD 55,800 (as of 2016). In comparison, the whole country has a Gini coefficient of 34 and an average income per household of USD 51,400. As of 2016, household spending excluding transport and housing was 5% above the national average. In 2016, education expenditure per household …

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Understanding German Mortgages.

Mortgage lenders in Germany allow you to borrow up to 100% of the property value (although you will have to cover some other costs of buying a house, such as purchase fees, with your own equity). While some German banks will be willing to finance the full amount, loans of around 80% are more common.

A major German community-oriented bank that wants to bring its model to Ireland believes it could play a role in solving the housing crisis. Sparkasse, the biggest bank in Germany, wants to create an alternative to the major commercial banks, particularly in regional towns.

The European Investment Bank has indicated support for the €200m project, said Sparkasse. That support is conditional on the proposal receiving political backing in Ireland. So far, this has been slow to materialize.

Sparkasse, which issues half of all German mortgages at rates well below standard Irish rates, believes Ireland is ideal for its municipality-owned, non-profit model.

The 200-year-old bank is aimed squarely at SMEs and the middle segment of the market. In Germany, where it has 300,000 staff in hundreds …

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