April 2012


For the expatriates out there: Why have you, or haven’t you, bought your home?

I’ve been doing a bit of thinking about the expats that I know and whether or not they own their own home and – ignoring those that are married to locals – I can only think of one expat who owns their own home.

Naturally I can understand why many expats might not buy their home: If you are only here for a year or two, it doesn’t make sense. If your work situation isn’t secure, it doesn’t make sense. And so on…

But for those of you who have been here awhile – why haven’t you bought your own home? At what point would you start to think about buying your own home?

4 comments to For the expatriates out there: Why have you, or haven’t you, bought your home?

  • Here’s one. Banks are reluctant to lend to foreigners.

    Here’s another. I live in Munich, a notoriously expensive city. The rent on my apartment probably gives my landlord a 2%-3% annual return. One would have to be incorporated, or use it as a tax loss to make buying property worthwhile. Even then, is it a good investment? It’s telling that in German we often refer to a property investment as a Kapitalanlage, which kind of implies thatit’s an enforced saving, or a place where money is put aside. The idea that one might make money off of the appreciation in value is far-fetched, and low-priced rental apartments are seen as an alternative to a term deposit.

    Here’s a third one, from left field. If I don’t pay my rent, my landlord can’t evict me. He can come in and seize my property, but he can’t make me homeless. That’s the law in Germany. If I become delinquent on my mortgage, the bank can sell my home and evict me (I assume).

    No wonder Germany is a nation of renters—the Swiss even more so. Yet these are two prosperous middle-class counties which one would think might value home ownership on cultural grounds.

    On the other hand, in a city that has lower property values (like Berlin), owning might make sense, since the extra out-of-pocket expense might be low enough for you to consider it worthwhile for the sake of making a place, truly, your own. And if you can renovate on the cheap, you can make money on it.

    I recently looked at Berlin real estate on Immoscout24. The difference between the price of renovated and unrenovated apartments in a place like Xberg is quite high. That suggests to me that the inherent, underlying value of the property is still pretty low—and it’s that inherent “land and skeleton” that appreciates in value, not the fancy doodads that your refined gay taste would install in it.

    I would definitely consider an investment property in Deutschland, though. A skiwohnung in one of the nearby Bergdorfen appeals. One can rent to holidaymakers during the season and enjoy peace & quiet the rest of the year.

  • After 5.5 years in DE in rented flats, I bought in the UK 3 months after arriving. The vision was/is to stay here for at least 5 years though, and my work permit is not employer-specific, so I’m not worried on an employment front. In Germany I knew it was not my long-term plan, so I didn’t buy there.

  • I’m married to a local, but I have friends who are a pair of expats and are searching for a house to purchase now. They want to buy because they want to stay here forever, they want to make a place their own, and they are both diy-ers and unable to control their diy-ness, so they are tired of improving someone else’s property with their own money (they built a patio and pergola at their current rented house, plus they’ve filled the garden with plants).

    Our reasons were the same, except I didn’t do any improvement work on our rentals.

    BTW, they don’t yet have permanent residency, but it doesn’t seem to be a problem with the bank.

  • Jentry

    We are planning on building next year. Markus’ inherited a lot that we can build on in Hirschau. So, that took some of the pressure off on the money front. We’ve been renting since I moved over here mainly because buying anything in our current town is crazy expensive….not Munich expensive, but still.

    Plus, thinking about how much building a house costs here in Germany, I nearly have a heart attack. Back in Texas, I could get a house double the size (not that I would want that), but still.

    We’re not going to build the typical German house though (stein auf stein), we’re going to go with a fertighaus (pre-fab home…but they have a much better reputation here than in the US).