A country of proud traditions and great natural beauty that's often overlooked by those moving abroad. But developing and exciting cities, affordable property and a great lifestyle make it an ideal choice

Germany is a country that is drenched in deep history, a land of proud people marked by the horrors or its past. There has been no other country that has had such a massive impact on the rest of the world. Whether we are talking automobiles or the printed press, Germany, the land of innovation has given us it all. The greats have been created here; Martin Luther and Albert Einstein were born in this pioneering country.

Nowadays, the mix of romanticism, baroque and renaissance architecture are truly an inspiration and the undeniably magical way in which the land lies across the country, leaves a nation wanting to be explored. From deep valleys to green forest lands, historical cities and quaint mountain resorts. Germany is a country that can offer so much more.

When house prices have rocketed all over Europe; the German market has barely shifted. Traditionally, unlike the Anglo-Europeans, Germans tend to buy their houses for life; they generally do not favour continually upgrading. This may explain why there are fewer real-estate fluctuations. Since the Germans view buying a house almost a once in a lifetime deal, they take their time, meticulously scouring the market s and this can sometimes take the best part of 2 years. That is why it is always wise, when investing in the German market to opt for the slightly more expensive house in a more desirable area, as when it comes to selling you will certainly be the one with the upper hand.

This feature is designed to guide you step by step through the process of buying your new home in Germany, all the information needed from choosing the area to securing the sale can be found on the following pages.

•    Country overview
•    Property facts
•    Buying process
•    Area guides

Country overview

Fast facts

Population: 82,369,552 (July 2008 EST.)
Capital city: Berlin
Major cities: Berlin, Hamburg, Frankfurt, Munich
Languages: German
Climate/weather Temperate and Marine: Generally wet winters and summers
Location: Central Europe, Bordering the North Sea and Baltic Sea. Lies between The Netherlands, Poland and South of Denmark
Healthcare: A government and private sector is available
Visa/residency: After a period of 3 months, permanent residency must be sort after
Economy:
•    Inflation rate (consumer pricesGDP (official exchange rate): $3.818 trillion (2008 EST.)
•    GDP (purchasing power parity): $2.863 trillion (2008 EST.)
•    GDP (real) growth rate: 1.7% (2008 EST.)
•    Foreign Direct Investment: $1.36 trillion (2008 EST.)

Germany still stands to be the world’s top exporter with some $1.133 trillion exported goods in 2006. It is the largest national economy in Europe, the 3rd largest by nominal GDP in the world.

Mortgage rates remain relatively low, although there has been a significant rise in places such as Munich.

Property facts
−    Main property markets
−    Ownership and restrictions
−    How safe is my contract
−    Mortgages

Main property markets
Property in Germany can be owned on both a freehold or lease hold basis. You will not encounter too much competition from German buyers, with only some 42% actually owning their homes. The more affluent the German the more likely they will be to own their home.

Forms of ownership/restrictions
In Germany, like in most EU countries it is possible to own a house individually, through a company, local authority and via legal entities.

Restrictions
There are currently no restrictions on foreign buyers in the German market. However if you are planning on staying permently, after a period of 3 months, you must apply for residency. This can be achieved via the local foreign national’s authority.

How safe is it?
The German public sector is very professional and overall any contractual agreements are secure. A notary or solicitor is required for all legal activities.    

Mortgages
Raising the capital to buy in Germany can be achieved by either raising finances on your UK home or negotiating a German mortgage. The German banking system is very conservative and will require evidence of good banking practice. The deposit tends to be somewhat higher then that of the UK. German mortgages tend to be 60-70% of the property value over a fixed term of 30 years.

If you are obtaining a mortgage outside of the Euro, remember although your house price will remain constant, the fluctuations in currency exchange must be taken into consideration.

The buying process
Germany is a nation that loves to rent therefore buying property should be relatively easy. However, once a German buys, it is generally for life this can lead to quite a stale market.  The process is fairly straight forward and there is an abundance of support from the notaries. For all your legal dealings it is always advisable to have a bilingual lawyer working on your behalf who understands both English and German Law.

−    Choosing an area
−    Viewings
−    Legal representation
−    The sale
−    Legal matters
−    Total costs

Choosing an area
As with all investments the starting point is always why you are buying, what are the main contributing factors? Once you have discovered this, setting about finding the right area should fall into place. Germany property is still relatively cheap but this is beginning to rise in certain areas, with others more likely to follow suit. With Munich winning the most liveable place, house prices, as to be expected, are generally higher here. However, Frankfurt and Hamburg have been tipped for the best investment potential.

Viewings
Germans, who have not opted to sell through an agent will advertise their properties in local papers, always be wary of any advertisements that are very inexpensive- if it’s too good to be true then it usually is.  They quite often require a lot of renovation work to be done to make the property habitable, costing over the price of the actual house. Another warning sign will be houses that advertise ‘large rooms’ (grosszugige) this generally means very expensive to heat. As with any property that has been on the market for a period of time, this can mean the area or house is undesirable and, especially in the German market, this does not have a good investment potential.

The use of an agent is generally advised, however it is not recommended to sign an exclusivity contract with any one agent, and this will allow you to benefit from ‘shopping around’ to get the best price. Always ask your agent from the outset who will be paying the commission, to avoid any unwanted surprises when it comes to signing.
Viewings are highly recommended; never rely on just a photo and plans set out in an advertisement.

Legal representation
A notary is required for all legal duties. They are hired as an impartial middleman between the vendor and buyer. The notary will do the necessary checks including land registry, this will ensure the property can actually be sold and whether there are any restrictions on its use.  Once the contract is signed the notary will register the change of ownership with the municipal government and enters the property onto the land register.

It is always advisable to hire a separate lawyer to handle your own personal dealings, preferably one who knows both the English and German law, and is bilingual. As when it comes to the signing ceremony, your personal lawyer can translate the contract.

The sale
The sale itself is not that dissimilar to the process in the UK. Firstly, you will be required to sign a reservation agreement. This will hold your property for generally a period of 1 to 4 weeks; at this point neither party is legally bound. 

In Germany it is practise for the buyer to present an ‘irrevocable acceptance’ of loan financing prior to signing the notary contracts, or if there is a cash deposit, evidence of funds should be made available at this point. The buyer legally needs to have a copy of the contract two weeks before the notary act. This time should be set aside for reviewing all contracts including the deed of purchase and all accompanying papers such as the official declaration of partition.

The next stage is to set a date for the Notary act. When signing the official papers all buyers need to be present and have all official documentation (passport) and legal papers. If the buyer cannot be present they can be represented by another party with power of attorney, if the buyer is a company then all company legal papers need to be available at this stage also.

The signing ceremony is attended by all parties and the notary public. The deeds are read aloud, in German and then signed by all parties. This contract is now binding.

The whole process will normally take between 4 and 7 weeks.

After a period of 2-4 weeks all taxes must be paid plus all notary/solicitor fees. Any late payments at this stage will cause a delay in the issuing of the clearance certificate

Taxes
−    Transfer tax (stamp duty) 3.5-4.5%
−    Registration fee 0.8 -1.2%
−    Notary and land registry (approx) 1.5%-2%
−    Translator or lawyer (approx) 1%
−    Bank fees 0.1-1%
        
Area guide
Berlin
Berlin is a vivacious and brave city, one that the Germans are so proud of. It has withstood events where other cities would have crumbled. A City steeped in history, where the remains of darker days are never far away. This is what gives Berlin its identity. Nowadays the buzzing metropolis attracts many young to come and thrive on the cities art and bohemian beat. 

Getting around is easy too, Berlin boasts having one of the best public transport system in the world.
Germany’s capital city is much like London. Made up of numerous vibrant suburbs, each one with their own unique styling; leafy and idyllic, cool and chic, corporate with its finger firmly placed on the pulse are just a few choices on its vast menu.

Frankfurt
The financial capital of Germany, Frankfurt offers a very attractive investment opportunity. With the second largest airport in Europe, Frankfurt enjoys a daily influx of travellers. Again, second only to Berlin in its array of museums and collections. For the young at heart, the nightlife is pretty outstanding too.

Munich
Now, with so many low cost airlines flying here daily from all over Europe, Munich is a very attractive option for those of you wishing for an easy commute back to the UK.  With excellent public amenities the quality of life here is extremely pleasant and has been voted the most liveable city. Located in the south of Germany, Munich itself will be first to revel in its contradictions. Old age traditions co-exist with an exciting vibrant scene. Sleek BMWs roam the streets, while commuters and shoppers alike pour into the super power industries and designer boutiques.

Eager to be perceived as a cosmopolitan metropolis, Munich plays host every year to the popular Oktoberfest.

Hamburg
Germany’s equivalent to Venice, with water everywhere. This city is undergoing a major revamp and even though it is still thought of as a lesser Berlin or Munich, the investment opportunity is second to none here. Major redevelopments have meant that the once shabby port city is quickly becoming a popular haunt. Thanks to the HafenCity development, one of the largest city centre developments in Europe, the 2nd largest city in Germany is getting the attention it has so longed craved.

Leipzig
This city located in the former East Germany is a once again, a focal point in Germanys history. The protests to overthrow the communist regime still remain prominent in the views of the cities people. The city displays many examples of new age art in its architecture, basically the Germans version of Art Noveau. The literary and music scene is beginning to thrive here too; making it an ideal cultural hotspot.