Condominium – Lease or Buy?


Even if most Germans dream about their own condominium – as it represents indepenence from landlords, freedom of development, individuality, as well as a secure investment – certain disagreement prevails with the question whether the object should be leased or bought. The representative surveyResiding and Living 2017“ conducted on behalf of the real estate platform unmistakingly demonstrates: every third person thinking about moving into a condominium rather invests his money into his own future home than into rented property. In the following, we want to show you why this is the correct decision by means of 8 reasons, speaking for the purchase of a condominium.

Rents Are Continuously Rising

No matter if Hamburg, Munich or Berlin, rents are continuously rising in all German metropolitan regions. Whoever is looking for an apartment to rent in the capital, currently needs to spend 21.9% of his income for the basic rent, an increase of 2.1% compared to the year 2012. Also the current affordability analysis of Immobilienscout24 demonstrates: the housing costs have significantly increased in all German major cities. Considering the developments outlined in the Housing Market Reports 2009 to 2015, the basic rents in Berlin have increased by almost unbelievable 45.2% within the last 6 years in avergage.

The result is unambigious: whoever is looking for a new apartment needs to pay significantly higher rents compared to the situation a few years ago. The main reasons for this particularly are the economic strength of the capital, the overall very high standards of living and the continually growing population resulting thereof, which automatically shoots up the apartment rents due to the simultaneously increasing demand.

Property Protects from Increasing Prices and Rents

It is not difficult to see, that those considering the purchase of an apartment automatically profit from the continuously rising rents. The purchase of an apartment thereby becomes more attractive with increasing prices. A particular advantage is the protection from rental increase, and if the apartment is not used privately, the owner profits from the higher rental income which automatically leads to increasing rates of return also.

Property Protects from Old-Age Poverty

As owners of residential property are not affected by rental payments, they also have a clear advantage over tenants in old age: they are better protected from old-age poverty. A retired owner saves up to 518 Euro compared to a tenant in average. Even if this amount does not seem much at first sight, it can make a significant difference in the household budget at large. So it is no wonder, that 73% of property owners are satisfied with their purchase. A condominium or house is a reasonable retirement alternative and tremendously helps the enjoyment of the well-deserved retirement. The numbers speak for themselves: nearly one third of Germans considers property investment as fundamental component of their pension scheme, following the survey conducted on behalf of

Asset Development with Property Ownership

According to a survey by the market reasearch company empirica, property owners and tenants also tremendously distinguish themselves in terms of asset development. Apart from the protection from old-age poverty, this is another substantial advantage of property ownership. Even if the income of both parties is on the same level, tenant households build up less assets. The discrepancy is immense. Property owners between 55 and 59 years averagely possess six times more assets than tenants. Another reason, to invest into the purchase of real estate the quickest possible.

Ideal Conditions for Home Purchase

The conditions for purchasing a home have never been as ideal as today. Especially the historically low interest rates and the still relatively prices per square meter in Berlin determine the favourable situation. Apart from Hamburg, Leipzig and Dresden, the capital is still among the most affordable German cities, so that the timing for purchasing real estate could not be better.

Lucrative Investment

Berlin remains one of the most popular cities of the world. Not only on the basis of the varied cultural offering or the ever-growing economic strength, but particularly by means of the still relatively low prices per square meter, the metropolis at the Spree enjoys international favourability. In international comparison, Berlin positions itself far ahead of Vienna or Paris, where you have to pay at least double or three times more, not even speaking of the extraordinarily high prices per square meter in London. The development potential of Berlin therefore remains enourmous.

Condominiums Protect from Inflation

The purchase of a condominium can also protect from inflation. Already at a comparatively low inflation rate, the purchasing power of assets may significantly decrease over the years. In just ten years, three-digit amounts are easily lost this way. Yet, whoever decides for the purchase of residential property, actively counteracts this problem, as the asset value of the property increases over the years, while the value of the money surfaces simultaneously.

Advantages in Inheritance Tax

Even if a condominium is passed on, you can profit from distinctive advantages. If a condominium or home is actually passed on to the spouse or the registered partner, no inheritance tax is due regardless of the value of the property itself. This regulation is valid if the property has not been sold, rented or leased ten years after the inheritance. Also children and grandchildren are exempt from taxation, as long as the parents have already passed and as long the living space does not exceed 200 square meters.

Conclusion: Invest Now!

Whoever is looking for an apartment at the moment, should definitely consider buying it, instead of renting. If you are currently looking for an apartment or in the planning phase, then do not hesitate to contact us today via telephone or mail. We are looking forward to meeting you!

Your Accord Estates GmbH Team



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