Brief outline
Leipzig - the "little Paris of Germany", or the "new Berlin", as the Germans call it, is a city with beautiful architecture,
huge well-groomed parks making up a third of its square, charming streets with cozy cafes and art workshops. Crystal
clear lakes in the immediate vicinity of the center, quiet canals with canoes and 457 bridges, 39 museums and
90 churches ... History here rests peacefully in the cautious embraces of the modern.
A great attraction for investors are moderate prices for Leipzig real estate , which are steadily growing, providing high
profitability of the facilities. Experts recall that just a few years ago it was possible to buy from the state whole houses
and even the buildings of former factories for only € 1. The city, which survived the outflow of population in the 90's
due to unemployment, turned into a surreal metropolis with crumbling architectural masterpieces "decorated" with graffiti.
However, the situation changed when Porsche and BMW settled in Leipzig, as well as logistics giants DHL and Amazon,
attracted by affordable real estate and labor. Of course, the most far-sighted of investors began to buy houses here,
and even entire neighborhoods - and preserving the authentic architecture, gradually brought them back to life.
Leipzig is a real paradise for students, artists and musicians who can find here inexpensive and even free housing in
exchange for a small repair or maintenance of the apartment in a well-maintained condition. In the late 90s, the city
authorities, in an attempt to stop the collapse of empty buildings, created a program whereby the owner of a residential
building, unable to restore it, can lease it free of charge, and tenants, usually artists or students, can live free of charge
for minor repairs. So, since the beginning of the two thousandth the population of the city has grown by 100 000 people
- and today it makes 580 000 inhabitants.
All this has had a positive effect on the development of the real estate market, the growth of the cost of housing and
rental rates, a decrease in the percentage of vacant housing, which attracts new investors to the city.
Interesting Facts
- The University of Leipzig is one of the oldest in Germany, and the University-Clinic is one of the best medical
institutions in Europe. His Cardiology Center enjoys a high reputation. It is in Leipzig that officially the best
orthopedist of Germany works - Dr. Rose. - The opera house in November hosts the Moscow Evenings Ball every year, which gathers the business,
diplomatic and creative elite of Germany and Russia. Tickets are sold almost a year in advance. - The world's second-largest indoor rainforest Gondwanaeland is located in the Leipzig Zoo and will offer you a
boat ride in a T-shirt and shorts when outdoors -5 ° C frost. - In Leipzig, you can literally create your own Porsche - or enjoy a test drive on its green track. Also, you can
reserve a tour of the plant, ending it with lunch in the elegant Porsche restaurant. - The Consulate of the Russian Federation operates in Leipzig. According to the employment agency, about
15,000 people from the CIS countries are registered in the city, and unofficially more than 25,000.
Why Leipzig?
It's not for nothing that Leipzig attracts investors from all over the world. According to the British newspaper The
Financial Times, the city has been the fastest growing city in Germany for two consecutive years. This is due to the
population growth from Germany and other countries of the world, attracted by new jobs, low interest rates of German
banks and still affordable prices for rental and purchase of real estate. Rental rates and the cost of real estate here
are constantly growing, but in comparison with prices in other regions of Germany remain at an affordable level.
One of the important factors is the fact that in the key megacities of Germany, Berlin and Munich, etc., prices have
reached a peak and are gradually becoming less attractive to investors. In the trend, so-called "category B" cities,
offering higher capital gains, profitability and rental profit.
So, for an identical one-room apartment in Berlin, the buyer will pay about € 100,000, in Munich - about € 200,000,
and in Leipzig about € 50,000. The net profitability of real estate in Leipzig slightly decreased in recent years due to
rising prices, but still at a higher level (about 4-5% per annum) than in Berlin (about 3-4%) or Munich (about 2-3%).
The "highest threshold" of profitability in Leipzig is 7-9% per annum.
At the same time, Leipzig is interesting not only for investments, but for its own living. The city has a developed
infrastructure, a wide choice of cultural events, ancient architecture, as well as the pleasant atmosphere of a large
metropolis, but without chaos and with clean ecology. It has its own airport, a well-developed transport connection
with other major cities in Germany, in particular, the Berlin-Munich high-speed train goes through Leipzig every hour.
Current situation in the real estate market
Demand for real estate, especially in the prestigious areas of Leipzig, remains consistently high. In comparison with
other German cities, the upper boundary of rents and prices has not yet been reached. The reason for this is still a
large volume of supply in the residential real estate market. Experts note that the growth in demand and sales in
Leipzig is indirectly caused by a strong rise in price and a decrease in supply, as well as profitability of real estate in
Berlin. Many investors switched from Berlin to Leipzig and Dresden.
Leipzig, like Germany as a whole, is the seller's market. If we consider the dynamics of prices over the past five years,
then the prices for real estate in Leipzig from 2012 to 2017 have more than doubled from € 1,000 per square meter
to € 2150 per square meter. m (the approximate average cost of one-, two-room apartments with an area of 30-60
square meters).
The average figures for property prices in Leipzig range from € 1,000 to € 2,500 per square meter, depending on the
area and condition of the apartment, and in the center of the city - an average of € 2500-3500. In new buildings of the
apartment are € 3000-4500 per square meter. m, and in the center reach and € 5000/1 square. m. If the facility needs
repair or sanitation, then it can be bought for about € 1,000 for a "square", certainly not in the center, but in one of the
developing regions with good growth potential (5-10 minutes drive from the center) .
Geography and prices
Many-faced Leipzig offers attractive opportunities for every buyer, and the area is chosen depending on lifestyle and
financial possibilities. The most attractive for investments are the areas surrounding the center, where there are still
many unrestored buildings, which can be purchased, including as a whole, as investments. True, behind them also
"hunts" a lot of local and foreign developers.
The advantage of Leipzig is that, in whatever region the real estate was bought, the prices for it will grow steadily.
And because of the increase in rental rates will also inevitably change the structure of tenants, quality, and, accordingly,
housing prices in these areas.
The most expensive and popular areas are Bakhfirtel (in honor of the composer IS Bach, who lived and wrote music
here) and Musikviertel.
Budget for the time being are the eastern regions with accessible beautiful old buildings, as well as the districts of
Schönau and Grünau with their multi-apartment buildings since the GDR with large green courtyards and free parking.
In the latter, many of our compatriots live, thanks to inexpensive rent. Apartments in these areas can be rented from
€ 4 per sq. M. m, and buy - less than € 2,000 per "square". Within a short drive or walking distance is the crystal
clear lake of Kulkvitser.
Waldstrasseviertel and parts of Gohlis are also attractive for purchase: it is quiet and peaceful, although in many other
areas there are exclusive streets and corners.
If the buyer is attracted to a more lively lifestyle, then he will like Südrovostadt, which is to the South of the city center with
endless shops, restaurants and cafes. In 10 minutes - two more crystal clear lakes: Kospudener and Markkleeberg.
Clara Zetkin Park
At the heart of the proposals are not so many, and they are sold very quickly. The modernized apartment building in
the prestigious Musicfirstel was sold for two weeks from the moment of the beginning of sales. Experts recommend
not to lose time if there is an optimal object: competitors do not slumber. In the Leipzig-Zentrum area, the average
cost per square meter is € 3620, in Zentrum-Sd, Zentrum-Ost, Zentrum-West, Zentrum-Nord - about € 2400. The
prestigious districts also include Sdvorstadt with an average cost per square meter in the € 3200 area and the Gohlis
area - about € 2200/1 sq. Km. Demand for premium real estate of the ultra-luxury class is still emerging in Leipzig, as
the city still has to create high-paying jobs in sufficient volume to create a large-scale demand for such housing.
Good areas also include Neustadt-Neuschnefeld, Cönnewitz, Schnefeld-Abtnaundorf with an average cost of "square"
from € 1400 to € 2000. And more simple and budgetary are considered Volkmarsdorf, Leutzsch, Möckern, Eutritzsch,
Mockau with an average cost of "square" from € 1000 to € 1,400.
Lindenau Harbor is being revised as a major urban development project. The result is a completely new area with the
construction of new housing in the form of new apartment buildings, townhouses and various projects of tenant owners.
Areas popular with foreigners
Foreigners acquire real estate in all areas of Leipzig, depending on the budget that they have. Real estate in the central
areas is more expensive and brings less income, but is more liquid. Real estate in simple areas is less liquid, but more
affordable and brings a higher return on a successful lease. For your own residence it is worth buying real estate in the
prestigious central districts of the city, and for renting - in areas with average or budget prices for housing, as the rental
yield in them will be higher.
In addition to the Germans themselves, investors from Austria, Switzerland and Israel have been the most active for
a long time. In recent years, wealthy investors from Asia have outstripped them, who buy up apartment buildings at
auctions 20-30% above market value.
For investors with medium budgets, it is possible to purchase very inexpensive apartments in the sleeping areas of
Leipzig or in satellite towns, for example, in Regis-Breitlingen, which can be rented out or sold. If the apartment needs
repair, then, having bought it at a bargain price, you can make inexpensive repairs and hand over to several students,
which the Germans like to do themselves is very profitable. By the way, about 60% of the offered for sale one-bedroom
apartments have already been leased.
It is worth to look closely
In Leipzig, you can "catch" very profitable offers, as in some parts of the city prices are just starting to rise. It is worth
paying attention to Lindenau, Altlidenau, as the city began a project to improve this beautiful region. In the area of
Lindenau-Hafen (former harbor) modern complexes are built with all amenities.
Lindenau is also a concentration of cultural and art objects, which attracts mainly students and young families.
Wilhelmin-style apartment buildings alternate with newly built townhouses and gardens of the surrounding area and
give the district a special touch. Its center is Lindenau-Markt, where all the shops, restaurants and everything that is
necessary for everyday life are concentrated. The Red Bull Arena is just a five minute drive away.
Also interesting are the areas of Prager Strae, due to the proximity of the University-Clinic, and its more affordable
neighbor Stötteritz. In the eastern part of the city there are also areas with beautiful parks and developed infrastructure,
and over time, due to rent increases, the structure of tenants will improve.
Certainly the city center is beautiful with charming and shady streets, as well as Golis, Golis Süd, the Waldstrae district
- their elegant architecture; Lively Sydforshtadt with a lot of rastoranchikov and cafes. Plagwitz and surrounding areas
offer a great potential for investment growth. In Plagwitz there is an Anglo-German school (LIS) and a kindergarten (LIK),
and construction is underway. Neighboring Kleinshocher will probably be next, but for now you can still find empty
buildings here.
Apartments with two bedrooms are in highest demand for both permanent residence and for renting .
For rent
Rent in Leipzig, like in Germany as a whole, is guided by the basic rate (Mietspiegel), and is also regulated by a
maximum rent increase of 15% over three years. In general, depending on the area and quality of the object, the rent
ranges from € 4 to € 8/1 sq. M. m and an average of € 7 excluding the cost of utilities. In the new facilities in the center,
the rent reaches € 8-10 per "square", but the prices here are higher (from € 4000-5000 / 1 sq. M.), Respectively, and
the profitability of the facilities is lower. The average yield in the central regions is at 3-4% per annum, in the middle /
simple areas can reach 6-7%.
New buildings offer quality housing - in areas in close proximity to the center, or in neighborhoods with the potential for
growth in the near future. The prices in them are from € 3000-4500 / 1 sq. M. m. According to the expert of
"Küne Immobilien" Christian Shönfelder, it is the new buildings that will retain high prices over time.
Where it is better to buy housing for permanent residence, and where - for renting
For their own residence in Leipzig the areas of Plagwitz, Golis, still available to Lindenau and Noi Lindenau may be
of interest. Also worth paying attention to the area of Prager Strae, near the University-Clinic, one of the best medical
institutions in Germany, and its Cardiology Center is one of the best in Europe. The city plans further improvement of
infrastructure in the area. Another interesting and more affordable neighbor is Stetteritz, which is also a short drive
from the University-Clinic. If the buyer uses the "buy-and-wait" strategy, the east of Leipzig will suit him most.
In the northern part of the city, where Porsche, BMW, DHL and Amazon are located nearby, you can count on the
demand for rental housing. These are all areas of Golis - Golis Sud, Golis-Nord, Loitz, Oyitritz, Altlindenau, Lindenau,
and Noi Lidenau.
Southwest: Schnau, Grnau districts - there are a lot of inexpensive housing for rent in apartment buildings of the GDR
era, with huge green courtyards, often fenced off from dogs and cars, and almost unlimited free parking - a luxury that
the center can not always offer.
Five expert advice to all who are considering buying a house in Leipzig.
- Make the right choice . In Leipzig, it may be very profitable to buy an object for renovation in one of the best areas.
If the house needs repair, it is not attractive for most ordinary buyers because of the work ahead, despite the low
price. However, having repaired the object, you can sell it much higher than the price you bought. Or rent out.
Due to low investment, profitability will be high. At the same time in Leipzig you will not miss in most areas:
the population of the city is growing rapidly, and with it the prices for real estate. Very attractive objects can be
bought at auctions (our team will be happy to assist in this matter). - Do not delay the purchase . Leipzig, like Germany as a whole, is the seller's market, and therefore, if you
were lucky enough to find an attractive property at an affordable price, do not delay decision-making, contact
the seller and make an offer, otherwise very quick investors can buy it quickly: Leipzig is " under the gun "not
only the Germans themselves, but also buyers from all over Europe and Asia, who are sometimes ready to pay
10-25% higher than the estimated price. And prices only grow, by 15-20% per year. - Well study the market to. And also cooperate only with a trusted real estate agency. Choose an area based on
your goals: either with opportunities for employment, or for profit. - Diversify the investment package . As the billionaire billionaire Grant Cardon once said, "The more windows
and doors, the better." Instead of supermarkets, favorite by Russian investors, one can invest in a multi-apartment
or apartment house or a shopping complex with several tenants. And also in a few inexpensive apartments, which
will significantly increase the rental income. - If possible, prefer buying an apartment without a tenant: rent grows along with the demand for it, and an empty
apartment can always be more profitable to rent at growing rates. The increase in rent is possible by 20% in three years.
Portal HomesOverseas.ru thanks for assistance in the preparation of the article Demi Pasaoglu ( Maximum Estates)
and Lubom Baumgertner
photocredits: flickr
HomesOverseas.ru
