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
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 centre.
In recent years – except for the Corona year 2021 – the number of inhabitants has risen steadily and reached a high of almost 765,000 people in 2022 due to high inward migration. A long-term comparison makes this development clear:
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
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.
Rents in Frankfurt have also been rising constantly for years. While the average offered rent in a new build in 2017 was 15.73 €/m², it was already 19.76 €/m² in 2022. Not only the location but also the size of the apartment plays an important role. Frankfurt attracts many students and commuters. Demand for compact apartments is correspondingly high. For apartment sizes of up to 30 m², rents are sometimes over 25 €/m². If you are interested in buying an investment property in Frankfurt am Main, smaller residential units in particular therefore offer interesting options.
Rental price development
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.
According to current forecasts, the number of inhabitants in the Main metropolis will increase to almost 830,000 by 2040. Of the approximately 410,000 households, more than 50 percent are single households. Accordingly, a higher demand for modern – and compact – living space is to be expected, making the investment in a property more attractive in the long term.
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
Supply and demand
Sources: IW Köln, Bürgeramt Statistik und Wahlen/Frankfurt am Main, Regionaldatenbank, PROJECT Research