Investing in Saxony real estate: attractive prices and high returns

Saxony is a federal state located in the east of Germany.

Despite being part of the Federal Republic of Germany, Saxony has proclaimed itself a free state for a hundred years now.

The largest and most populous cities in Saxony

• Leipzig
• The capital of the land is Dresden.
• Chemnitz

The area of Saxony is over 18,000 square kilometers, and it is home to more than 4 million people, making it the tenth largest and the sixth most populous state in Germany.

Saxony borders the federal states of Brandenburg, Saxony-Anhalt, Thuringia, and Bavaria, as well as Poland and the Czech Republic.

Attractiveness of Saxony

Saxony attracts tourists and those looking to buy real estate with its natural beauty, rich cultural heritage, history, and long-standing traditions.

Here you can find untouched and romantic spots with castles, palaces, and majestic old houses, nestled among mountains, meadows, valleys, and forests.

A trip to Saxony

To get to Saxony, you can use the international airports in Dresden and Leipzig.

Both airports are the same distance (about 70 km) from Chemnitz and serve continental and intercontinental flights.

A direct flight from Moscow to Dresden will take just under three hours, and the round-trip ticket will cost around 20,000 rubles.

As for Leipzig, you can only reach this city from Russia with a transfer, for example, in Vienna, Frankfurt, or Munich.

In that case, the travel time will exceed five hours, and ticket prices will start from 15,000 rubles.

There are no direct trains from Russia to the cities of Saxony, but it is possible to travel from Belorussky Station in Moscow to Berlin, and from there you can reach Dresden or Leipzig by local trains or by car.

Saxony is a developing state

Saxony, despite its title as a free state, has always been an open territory.

Innovations and modern high-tech industries are developing here, despite the high level of unemployment.

On its territory, there are automotive industry enterprises such as Porsche and BMW, as well as complex scientific research projects and the development of companies in the fields of information technology and biotechnology.

Nature of Saxony

Saxony is also famous for its nature, which is often referred to as the "green heart of Europe."

For example, in Dresden, 63% of the area is occupied by forests and green spaces.

Here, the Germans themselves relax, as well as residents from neighboring Poland and the Czech Republic.

One of the key advantages of Saxony is its pleasant climate.

The climate in Saxony is ideal for European residents. In winter, the temperature rarely drops below -2 °C, while in summer it reaches a comfortable +24 °C. This combination of pleasant climate, natural charm and a variety of activities creates optimal conditions for a comfortable vacation.

A large number of diasporas in Saxony.

Saxony is also known for its large number of diasporas formed as a result of several waves of immigration in the territory of the former GDR. According to the 2014 census data, there were about 10,000 former Russians living in Saxony. Despite this, the strongest "Regida" movement emerged here with the aim of combating excessive immigration.

Investing in real estate in Saxony.

Experts believe that investing in real estate in Saxony promises long-term profits, as the regions of this land will develop steadily and gradually. The real estate market in Saxony, similar to Germany as a whole, can be divided into expensive metropolises and more affordable medium and small towns.

Popular cities for investment.

Dresden and Leipzig are particularly popular among investors, as they, along with Berlin, are the most attractive cities in East Germany for capital investments. The population of these cities is growing, new businesses are emerging, new jobs are being created, and the cost of housing and rental rates is increasing.

The difference in real estate prices.

However, the cost of real estate in East Germany is traditionally lower than in the western part of the country. For example, the average price per square meter of housing in Germany ranges from €2700 to €4000, while in Saxony, this figure is about €1300-2000. Even considering a 10-year increase in prices, housing in Saxony remains twice as cheap as the national average. For instance, in Munich, where real estate is the most expensive in Germany, the price per square meter is around €7000.

Low rental rates.

Rental rates in Saxony are also among the lowest in the country. The cost of renting 1 square meter of housing is €6.04 per month. In Leipzig this figure is slightly higher at €6.68, in Dresden it is €7.6 and in Chemnitz it is less than €5. While in Munich, for example, the rental rate is close to €17.5 per 1 square meter per month. All of the above rates apply only to the rent of living space, utilities are paid separately.

Real estate purchase in Russia: promising cities

Among the popular cities for real estate purchases in Russia, it's worth noting Zwickau and Plauen. These cities attract buyers with their low prices per square meter (Zwickau around €800/sq. m, Plauen around €650/sq. m), as well as high investment returns (around 10% per annum). However, there is no significant increase in real estate prices here. The rental cost for housing is €4.5/sq. m excluding utilities in Plauen and approximately €5/sq. m in Zwickau.

The German real estate market managed to avoid a sharp decline during the global financial crisis of 2008-2009, which speaks to its stability. When investing in German real estate, especially in income-generating properties, it is more important to focus on stable capital preservation rather than just high returns.

The tax burden does not have a significant impact on small investment projects; however, it becomes noticeable when calculating the returns on more expensive properties. Experts note that the secondary real estate market in Saxony often requires renovation and repairs. Carrying out such work increases the cost per square meter, while the lack of it may lead to additional expenses for the new owner, which means that housing prices will again approach the average level.

Leipzig: investment prospects

Leipzig is one of the popular investment destinations. This largest city in Saxony is located just 160 km from Berlin. In the past, after World War II, Leipzig was an important urban center of the GDR, but over time its significance declined, despite the strong economy of East Germany. However, in 2015, Leipzig became the fastest-growing city among Germany's metropolises with a population of over half a million people.

Initially, the unemployment rate in Leipzig was one of the highest in the country - nearly 10%. The unfavorable job situation led to a migration of the population to other regions of Germany. It is precisely because of the high unemployment that experts explain the relatively low real estate prices and low liquidity of residential properties in Leipzig.

The cost of real estate in Leipzig

The cost of real estate in Leipzig can range from €1500 to €2500 per square meter.

Chemnitz is the third largest city in Saxony.

Chemnitz is the third largest city in Saxony, with a population of about 240,000 people, including 10,000 students from the Technical University. The city was formerly known as Karl-Marx-Stadt in honor of Karl Marx, who is regarded as the greatest son of the German people and the founder of socialist doctrine.

Unemployment and migration issues in Chemnitz

Chemnitz is currently facing problems of high unemployment and migration from the region. According to a BBC report, the city had the lowest birth rate in the world in 2006. The low demand for housing explains the low cost of real estate, making it the most affordable city to buy in Saxony. The cost per square meter starts at €760, and the average price is around €1200. The price difference between the cheapest and most expensive properties is 3-4 times. For example, in the areas of Markersdorf and Bernsdorf the cost of 1 square meter is about €615-650, and in the areas of Schönau and Kapellenberg prices already reach €2000-2500 per square meter.

The cost of real estate in Chemnitz

With a budget of €13,000 to €16,000, you can purchase a regular apartment in the city center or a house for renovation in the nearby suburbs of Chemnitz. You can also buy a two- or three-room apartment for €22,000-25,000, which can be rented out for additional income. The price per square meter in private houses ranges from €1,350 to €1,600.

Zwickau - a city with an automotive history

Zwickau, located in a valley at the foot of the Ore Mountains, is part of the so-called Saxon Triangle - the area between Leipzig, Dresden and Chemnitz. The city is famous for its automobile manufacturers and has a rich automotive history. Famous brands such as Horch, Audi, Auto Union (predecessor of Audi), Trabant and Volkswagen are manufactured and marketed here. According to modern guidebooks, Zwickau has been transformed from a small working-class village into an elegant Art Nouveau town.

The cost of housing in Zwickau

For about €830 per square meter, you can buy an apartment with an area of 60 square meters in Zwickau. In the neighborhood of Reichenbacher Str./Freiheitssiedlung, housing prices are even lower - around €352 per square meter. One of the most prestigious areas in Zwickau is Talstraße/Trillerberg, where apartment prices reach €2670 per square meter.

Conclusion

Acquiring real estate in Saxony is a great opportunity for capital investment and achieving high returns. Saxony attracts tourists and buyers with its beautiful nature, rich cultural heritage, and history. Cities like Leipzig, Dresden, and Chemnitz offer a variety of real estate options at attractive prices. The cost of real estate in Saxony is significantly lower than in other regions of Germany. Here, you can find apartments and houses at affordable prices, as well as achieve high rental yields. Additionally, the stability and reliability of the German real estate market make investing here a promising long-term prospect. If you plan to study at one of Saxony's universities or simply want to own property in this beautiful part of Germany, purchasing real estate in Saxony is an excellent decision. You will find cozy apartments and houses surrounded by beautiful nature and historical landmarks. Don’t miss the opportunity to invest your funds in Saxony's real estate and enjoy its benefits. Our experts are always ready to offer you the best options at affordable prices.