Buying instead of renting: Where buying property will be worthwhile in 2025!

Buying instead of renting: Where buying property will be worthwhile in 2025!

The real estate market in Germany appears to be in transition in 2024: while prices for existing condominiums have fallen by 0.7%, net rents have shown a significant increase of 5.1%. This development shows a clear trend – for many households, buying is becoming cheaper than renting. The FTD reports that in 48 regions of Germany, buying real estate is more worthwhile than renting.

A look at the “Postbank Housing Atlas 2025” confirms that 23% of households live in the so-called cheap purchasing regions, where less than 15% of income is needed for loan payments. In contrast, a quarter of households in 56 regions are struggling with high burdens, where at least 25% of their income is spent on real estate financing. Even though rents have risen, the share of construction financing in household income has fallen from 19.2% to 18.3%.

Focus on financial burdens

The net rent for an average 70 square meter apartment now takes up 14.1% of the household budget, which is an increase compared to 13.9% last year. In this context, it becomes clear that rents are rising faster than incomes - this development often raises the question of whether tenants would be better off investing in a condominium. Construction features such as property transfer tax and notary costs must be taken into account, but the basic consideration remains: in rural regions, especially in eastern Germany, a more favorable financial structure can often be achieved.

The average burden for tenants in large cities can be seen from market analyses. The Postbank highlights that in cities like Berlin, Munich and Hamburg the difference between purchase and rental costs is very significant. Here the rent burden in Berlin reaches around 27.1%, in Munich it is 25.5%, which makes the decision to buy even more urgent, especially considering the rising housing costs.

Regional differences and purchase recommendations

If you look at the entire Federal Republic, an interesting picture emerges: In 130 districts and independent cities, buying real estate is considered affordable, as loan payments account for less than 15% of the median income. An example is the Mansfeld-Südharz district, where the financing rate is 3.1% below the rent. Such convenient locations are extremely attractive for buyers. However, buyers should always keep an eye on the long-term affordability of the financing and plan enough buffer for unforeseen expenses.

The development of property prices continues to be influenced by various factors, such as construction costs, availability of building land and general economic conditions, according to the report Engel & Völkers. These factors have a direct impact on demand and therefore also on prices.

In summary, it can be seen that buying real estate is becoming more attractive in many regions of Germany, while rental prices continue to rise rapidly. For future buyers it is important to look closely and take advantage of the best opportunities - there is a chance of a good deal in many areas!