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Germany or Austria: Where’s the best place for foreigners to buy property?

If you're considering buying property in central Europe, you might be wondering whether Austria or Germany makes more sense. Here's a rundown of the pros and cons of both countries, from prices to rules and regulations.

Rothenburg ob der Tauber
The small town of Rothenburg ob der Tauber in northern Bavaria, Germany. Photo by Roman Kraft on Unsplash

Though the two neighbouring countries may share a language, there are plenty of differences between Germany and Austria that may confuse foreigners trying to decide which country to live in.

Though the Alpine country down south has a lot in common with Bavaria, some parts of Germany are a far cry from the soaring mountains and crystalline lakes of Austria, with a much more varied (and often flatter) landscape. What’s more, each country has its own unique culture, economy and set of rules for foreigners to get their heads around.

If you’re wondering which country is the best to live in, you might be interested in checking out our recent comparison below:

Austria vs Germany: Which country is better to move to?

But if you’re planning on relocating and buying your own place – or possibly wondering which country is best for investing in property – these are some of the key differences to consider. 


Despite the difference in size between Germany and Austria, it’s worth noting that both countries see a huge amount of regional variation in house and flat prices.

In Austria, for instance, the northern state of Tirol – where Innsbruck is located – tends to have some of the highest property prices in the country. Here, flats can cost around €8,500 per square metre, while houses cost around €7,770 per square metre – and it’s not unusual for properties to go for millions. In the popular ski resort of Kitzbühel, for instance, you can expect to pay as much as €16,000 per square metre for a house. 

As you might expect, prices in Vienna are also among the highest in the country, followed by the states of Vorarlberg and Salzburg. You can expect to shell out around €5,000 to €6,000 per square metre for properties in these areas. 

On the lower end of the scale, Burgenland – Austria’s easternmost state bordering Hungary – has the lowest prices in the country, averaging out at €1,900 per square metre for flats and €2,000 per square metre for houses.

READ ALSO: Can foreigners buy property in Austria?

As you might expect for such a large country, regional differences are equally pronounced, and the highest prices tend to be found in major cities such as Munich, Berlin and Frankfurt. 

The Bavarian capital of Munich in particular is known for its eye-wateringly high prices, with flats and properties here costing a solid €9,000 to €10,000 per square metre. That said, Berlin is catching up rapidly, and buyers here may find themselves paying as much €7,700 per square metre for a flat in a central location these days. 

A miniature house with new house keys.

A miniature house with new house keys. Photo by Tierra Mallorca on Unsplash

In the banking hub of Frankfurt, meanwhile, paying €6,500 per square metre isn’t uncommon. 

Cheaper districts (and cities) in Germany include the former eastern states, such as Saxony, Saxony-Anhalt and Thuringia. Here, prices tend be below €3,000 per square metre on average – though there are still differences between urban and rural areas. 

On average, buyers shell out around €4,235 per square metre for properties in Germany, with median flat and house prices coming in at €325,000 and €530,000 respectively. 

Additional costs 

When it comes to both Austria and Germany, the process of buying a house can be full of bureaucratic pitfalls and confusing rules. However, purchasing a house in Austria tends to involve a little more paperwork and patience than in Germany.

Buying property in either country also comes with a range of hidden fees, mostly in the form of administrative fees and taxes such as property transfer tax, notary fees, translators’ and interpreters’ fees and commission for estate agents. 

In Austria, you’ll generally pay 3.5 percent of the property price in property transfer tax upon purchase, pay to enter the property and mortgage into the land register (2.3 percent of property price) and pay for a contract to be drawn up, which can cost between one and three percent. On top of this, you may have to pay commission of around three percent to your estate agent. 

In Germany, meanwhile, property taxes vary from state to state and can be anywhere between 3.5 and 6.5 percent. You’ll also have to factor in around 1.5 percent on top of that for a notary to draw up the contract between the seller and buyer and enter your purchase into the land registry. Then, you may have to factor in some commission for your estate agent, which also varies regionally from around 3 to 3.5 percent.

Unlike in some countries like the UK, though, you rarely face excessive legal costs for lawyers to represent you as the notary acts as the neutral mediator between the two parties and should ensure the contract is air-tight.  

For more information on these additional costs, see our explainers below:

If you see property more as an investment – or a business opportunity – then it’s also worth being aware that both countries have relatively high capital gains tax to disincentivise the practice of ‘flipping’ houses in a short space of time.

Hurdles for foreigners 

Buying a property isn’t just about whether you can afford it: it’s also about the rules and red-tape you may have to navigate.

In Austria, for example, there are key restrictions on so-called third-country nationals – i.e. non-EU citizens – buying property in the country. In general, if you fall into this category, you will only be able to buy a house or flat if you have a permanent residence permit. However, the rules do vary slightly from state to state.

If you’re an EU citizen, you generally have the same rights as Austrian citizens, though there are still some restrictions on foreigners buying second homes in the some regions of the country – and particularly close to the German border.

A view of the famously beautiful Hallstadt, Austria.

A view of the famously beautiful Hallstadt, Austria. Photo by Hasmik Ghazaryan Olson onUnsplash

In Germany, meanwhile, these restrictions don’t apply. As a foreigner, you’re entitled to buy property in the country regardless of your immigration status, and can buy houses or flats either to live in yourself or for the purpose of renting them out. If it’s the latter, you’ll even get perks such as lower purchase prices and zero percent commission. 

Another difficulty for foreigners in Austria are the new tighter restrictions on giving out mortgages. Buyers now generally need to put down 20 percent of the purchase price in the form of a deposit, and mortgages can generally last no more than 35 years or exceed 40 percent of a buyer’s household income. 


In Germany, things are a bit less strict, but do depend a fair bit on whether you’re a long-term resident. If you are, you may even  be able to get a mortgage covering 100 percent of a property’s value. If you don’t live or work in Germany, only up to 60 percent is possible.

Mortgage repayments also can’t exceed more than 35 percent of a buyer’s net income, so high earners are obviously at an advantage here.

It’s also fairly common knowledge that non-permanant residents may find it slightly harder to get mortgages, so that’s something to be aware of too. 

Of course, the language barrier can also be a major issue for internationals, though these days there are far more websites and resources geared to foreigners that can help you in your search, as well as specialised estate agents. 

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How high interest rates are hampering homeowners’ dreams in Germany

Rising interest rates are driving property developers in Germany into bankruptcy - and leaving would-be homeowners out in the cold. Will the government's latest plans to tackle the crisis be enough?

How high interest rates are hampering homeowners' dreams in Germany

Valeriy Shevchenko felt like he made the purchase of his lifetime when he beat a queue of prospective buyers to secure a two-bedroom apartment in one of Berlin’s most popular districts.

Two years on, the 33-year-old’s housing dreams have come crashing down after the developer of his new home, Project Immobilien, went bankrupt.

Hit by a sudden jump in interest rates and raw material costs, twice as many developers have filed for insolvency over the last year than during the previous 12 months.

Like hundreds of homeowners-to-be across the country, Shevchenko found construction of his new home suddenly halted, as workers cleared out of the site where the concrete skeleton of the building stands with no windows.

READ ALSO: Germany sees record drop in property prices

“From the middle of August, the construction was frozen. The cabinets for the workers here, the crane in the middle, everything moved away,” said Shevchenko at the site, shellshocked by the setback.

With such scenes multiplying across the country, Chancellor Olaf Scholz’s government on Monday offered a new package of measures to help ease the pressure on builders and homebuyers.

They include a pledge to not toughen up energy standards that could prove costly for developers, while extending mortgage help to families and financing for renovation.

The construction sector voiced satisfaction with the package, with Tim-Oliver Müller, president of German building lobby group HDB, saying that the measures were “more comprehensive than expected”.

‘All my savings’

For years, record low interest rates and strong demand had spurred new projects and investment in Germany’s property market.

But a sharp rise in consumer prices as a consequence of Russia’s invasion of Ukraine has forced the European Central Bank to aggressively raise interest rates to curb inflation, drastically pushing up mortgage costs and in turn bringing down property prices as well as profit margins of building projects.

Builders are also suffering from higher raw material costs, a problem that had already begun during the pandemic but which has been accentuated by the Ukraine war.

A construction worker works on the new construction of an apartment building in the new development area of ​​Hanover-Kronsrode.

A construction worker works on the new construction of an apartment building in the new development area of ​​Hanover-Kronsrode. Photo: picture alliance/dpa | Demy Becker

“Investors no longer know how to make certain projects profitable,” said Müller.

In a sign of the crisis, developer giant Vonovia recently decided to put 60,000 projects on hold.

One in five property companies has reported cancelling building projects in August, while 11.9 percent face financing difficulties, according to a recent survey by economic research institute Ifo, which described the figures as unprecedented in 30 years.

READ ALSO: Why does Germany keep missing its house-building targets?

Many of the halted projects are also well advanced, pushing buyers into dire financial straits.

In Berlin, investors of the Project Immobilien’s construction had already paid half of what is due.

“I’m not a rich person. My money is the fruit of my labour,” said Shevchenko, who had already paid up €250,000 for the apartment he bought for half a million euros.

Valeriy Shevchenko

Valeriy Shevchenko of Russia poses in front of the site of the unfinished “Malmoerstrasse 28” residential housing project on September 18th, 2023. Photo: JOHN MACDOUGALL / AFP

With no insurance purchased by the building company or the future homeowners, there is no financial protection against the sudden bankruptcy.

Their only hope now is to find someone else to take over the construction, or to finish it themselves.

“I never thought that something like that could happen in Germany,” said Marina Prakharchuk, 39, with tears in her eyes.

The Belarusian had paid up €175,000 for her 45-metre square apartment.

“All my savings are in there,” said the employee of a logistics company.

Housing shortage

Beyond the investors left roofless by insolvent developers, the property crisis risks spiralling into a giant social crisis as the knock-on effects from the building slowdown crash into the rental market.

Scholz’s government had promised to build 400,000 homes a year to alleviate an endemic housing shortage made worse by burgeoning demand from an inflow of refugees and foreign workers.

But building permits have nose-dived 25 percent between January and June compared to a year ago.

READ ALSO: EXPLAINED: What is Germany doing to solve its housing crisis?

Experts believe the sector will struggle to even hit 250,000 in new build approvals this year, while next year bodes no better with a forecast of under 200,000.

With fewer new housing stock coming on the market, rents are rising unabated, further eroding households’ purchasing power.

“More affordable housing must be built in Germany so that young families and those who are looking for apartments can have a good chance of finding one,” said Scholz, after the crisis talks.