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Real estate for capital investment in Frankfurt am Main

What about the housing market in the financial metropolis? Does the purchase of a property for capital investment in Frankfurt am Main promise good long-term rentability and high returns? Here you can find out interesting facts about investment property in Frankfurt.

Investment in Frankfurt real estate

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Facts about your investment in Frankfurt

1 | Rapid growth

With the European Central Bank, branches of more than 300 international banks, and Germany's largest airport, the Main metropolis boasts excellent prospects on the job market and above-average salaries. The Brexit also makes Frankfurt even more attractive as a banking and stock exchange center.

In recent years, the number of inhabitants has increased by more than 9 percent – a high figure compared with other major German cities. A long-term comparison makes this development even more evident:

Population growth

population growth

2 | These are the most popular districts

According to the Frankfurter Neue Presse, central and centrally located districts are particularly popular. A survey showed that Bornheim is ahead of the field here: Around 11.8 percent of those surveyed would like to have an apartment or a house in the quarter bordering the Stadtmitte III district. The following areas are also popular and therefore particularly attractive in terms of buying a property as an investment:

Percentage of respondents who would like to live here

  • Bornheim: 11.8%
  • Bergen-Enkheim, Bockenheim: 7.5%
  • Bonames, Eschersheim, Frankfurter Berg, Gallusviertel, Sachsenhausen-Süd: 4.3%

3 | Tight housing market

The demand on the Frankfurt housing market is correspondingly high. Various legal requirements prevent the city from growing unrestrictedly, both in terms of width and height. Therefore, the prices for existing and new properties keep rising – especially, but not only, in the popular districts mentioned above. Anyone currently acquiring residential property in the Main metropolis can expect a further increase in value in the coming years.

4 | Rising rental prices

Rents in Frankfurt have also been rising steadily for years. While the average rent in 2008 was still 9.38 €/m², by 2018, it was already 13.59 €/m², according to the Frankfurt am Main Housing Office. Not only the location but also the size of the apartment plays an important role. Frankfurt attracts many students and commuters. The demand for compact flats and apartments is correspondingly high. With apartment sizes of up to 30 m², rents are sometimes over 20 €/m². If you are interested in buying an investment property in Frankfurt am Main, smaller residential units offer attractive options.

Rental price development

5 | The “rental brake” in Frankfurt am Main

In some large cities, the amendment of the rental law, or the so-called “rental brake”, has been in force since 2015. It states that rents for new leases in sought-after areas may only be a maximum of ten percent above the local comparative rent. Frankfurt is also one of the cities affected by the rent brake.

Excluded from this regulation are, among other things, new buildings that were used and let for the first time after 2014. So buying a new property gives you more freedom of choice.

6 | Real estate in Frankfurt as a financial investment: Conclusion

Current forecasts expect the number of inhabitants in the Main metropolis rising to over 829,000 by 2040, and the number of households to around 467,000, i.e., about 36,000 more than in 2020.

Correspondingly, higher demand for modern living space is to be expected, which makes investing in real estate more attractive in the long term.

7 | Facts and figures around Frankfurt am Main

Quality of life

Many people move to the city on the River Maine for work reasons. Frankfurt has much more to offer, including the carefully reconstructed old town, diversely cultural scene in Sachsenhausen and the international flair. Frankfurt is currently ranked seventh overall according to the Mercer survey.

   1st place: Vienna
 7th place: Frankfurt
  10th place: Stockholm
  45th place: New York
  57th place: Rome
  74th place: Dubai
103rd place: Shanghai
167th place: Moskow
231st place: Baghdad

Quality of life

Supply and demand

Net remuneration

Sources: Bürgeramt, Statistik und Wahlen

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