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PROPERTY

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.

Published: 12 September 2023 16:40 CEST
Updated: 12 November 2023 09:18 CET
Rothenburg ob der Tauber
The small town of Rothenburg ob der Tauber in northern Bavaria, Germany. Picturesque locales and the Alps are particularly popular with retirees in 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. 

Price 

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. 

READ ALSO: 

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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PROPERTY

Why it’s hard to find an apartment with air conditioning in Germany

When temperatures start to get up to 30C or more in Germany, a familiar debate begins. It often starts with a simple question, asked by a new arrival to the country: “Why don’t German homes have air conditioning?”

Published: 25 June 2024 16:58 CEST
Why it's hard to find an apartment with air conditioning in Germany

The tendency to avoid air conditioning (A/C) is not uniquely a German trend. Europeans tend to use A/C less than residents in the US, and some countries in Asia.

But as temperatures have crept slowly upwards due to climate change, and the number of hot days has increased, Europe has seen an increase in demand for air conditioning. Across the continent A/C use has more than doubled since 1990.

But A/C is used much more commonly in countries that see higher temperatures like Spain, Italy or France, whereas it is still uncommon in homes in Germany.

So why does Germany tend to lack air conditioning, and why aren’t more Germans interested in installing it?

It’s not a ‘hot’ country

Ask a German why air conditioning is so rare in the country, and you’ll probably hear some version of “Well Germany is not such a hot country.” Which may be true generally, but is a less than convincing explanation if you hear it on a sunny summer day when it’s 35C outside.

But it is worth keeping in mind that while Germany does have warm summers, often with at least a couple heat waves, super hot days are few compared to warmer countries, like those in southern Europe. 

Given Germany’s weather can really only be described as hot for a few weeks out of each year, and considering the costs of installing and running air conditioning, most Germans figure it’s not worth it.

attic with sliding window

A sliding attic window is designed to help tenants cool off, but it won’t help to open windows during the hottest part of the day. Photo: pa/obs LiDEKO | LiDEKO

This isn’t only reserved for homes, but extends to plenty of public spaces including office and government buildings, and to some public transportation as well. 

In fact, schools and workplaces do occasionally call it quits during hot weather spells in an event called hitzefrei.

READ ALSO: Ditching AC for ‘Hitzefrei’ – Taking on the German summer as a Californian

Air conditioning is energy intensive and expensive

The other side of the argument against air conditioning is that both installation and operating costs can be expensive. Air conditioning tends to be energy inefficient, so using it can significantly increase your utility bill.

From an environmental point of view, all the energy used for air conditioning, if Germany was to start installing A/C at scale, would add to the country’s energy demand and greenhouse gas emissions – both of which Germany is already struggling to cut down year after year as part of its climate goals.

It is an ironic feature of traditional air conditioning that it creates a negative feedback loop: More people rely on air conditioning to stay cool as weather warms, but weather continues warming in part due to emissions from air conditioning.

That said there are cases where access to air conditioning can save lives. In particular elderly people and those with health-risks are prone to heat sensitivity. So while it’s probably good that not every house in Germany has A/C, it’s important that hospitals and some other buildings in a given city do.

READ ALSO: How German cities are adapting to rising temperatures

‘Cold air makes you sick’

Along with the reasonable (if debatable) reasons for the lack of A/C in Germany, there are also cultural factors.

On the social media website Reddit, a user posted the question, “Will more places in Germany start using air conditioning?”

One of the top comments read, “Don’t you know cold air makes you sick….says Oma (the German word for grandma). 

While that comment comes off a bit tongue in cheek, it touches on a real and deeply-ingrained belief that persists among parts of the German population: That exposure to cold, or even maybe a cool breeze, is bad for your health. This includes a draft in your house, called a Durchzug in German.

For this reason, the German Red Cross felt compelled to debunk the Durchzug health myth in a hot weather warning they issued in 2019.

a heat pump is installed

An employee inspects a heat pump in front of a newly built residential building. Heat pumps are also effective for cooling. Photo: picture alliance/dpa | Bernd Weißbrod

What can you do about the heat?

Regardless of where you stand on the air conditioning debate, if you don’t have a personal A/C unit at home presently, the best way to endure the hottest days of summer may be to take a few tips from the locals.

During my first summer in Germany, I took to leaving the windows open throughout the day, thinking that the occasional warm breeze was the best relief I could hope for at home. But one day my landlord came by and asked me why I was suffering in the heat with the windows open.

He recommended that I instead leave the windows open at night or in the early morning to get some fresh cool air inside, and then keep all the windows closed through the heat of the day. I tried this strategy the next day, and immediately felt that he was right.

Compared to homes in the US, for instance, German homes tend to be very well insulated. This can be equally important in the summer as it means that the interior tends to stay cooler than the outside (as long as you keep it mostly sealed off).

On extremely hot days, you might even keep your shutters down to shade the windows and prevent the sun from shining through.

Of course the effectiveness of the strategy depends on having a home that’s well insulated, including double paned windows and well-sealed doors etc. If you feel that the inside of your house is getting as warm or warmer than the outside, then it’s probably time to open up the windows or go outside and sit in the shade.

Fans are also useful. Best is a ceiling fan designed to rotate counter-clockwise to push air downward, which can maximise wind chill within a home, but floor fans can also help.

Ironically, in the longer term it may actually be heat pumps that help Germany to modernise its cooling infrastructure. 

Heat pumps maximise the efficiency of heating systems by moving warm air around a building, and they can also work with cooling systems. Many heat pump systems on the market today are already built to support both heating and cooling functions, and they are much more energy efficient than classic air condition systems.

READ ALSO: Who can apply for Germany’s new heat pump grants for homes?

Unfortunately for tenants with no heat pump and no A/C, the best you can do for now is take notes of cool places in your city where you can relax in the shade or in the water during the hottest hours or the hottest days.

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