Leipzig – an attractive location for capital investors

Thinking of investments and retirement?

Think about Leipzig as a possible solution!

At some stage in life you will be wondering about the future and your income in older age. Regardless whether you are an avid investor or just now thinking about an income to bolster your pension, property is becoming the best source of investment. At Black Label Properties, we provide a full property service from finding the right property, to finance and management of your property. Let’s talk about Leipzig, an excellent investment opportunity due to the low price per square metre (PPSM), which is only going to go in one direction, up!

A Fantastic Opportunity

Let’s take a look at the typical cost per square metre while average prices per square metre in conurbations such as Munich (9,569 euros per square metre), Frankfurt am Main (7,280 euros), Stuttgart (7,158 euros), Hamburg (6,324 euros) or Berlin (6,056 euros) were already in the upper four-digit range in 2019[1], investors should keep an eye on the real estate market in the east of the country. Particularly noteworthy is the city of Leipzig, which has gained significantly in popularity in recent years and also promises very good prospects in official statistics and forecasts. In addition, attractive returns are possible compared to the cities just mentioned.

 

The future looks bright – Leipzig the fastest growing city in Germany by 2035

While rural regions are losing inhabitants, cities are booming and are becoming increasingly important. Many families have moved from the country to the city due to greater convenience for work and family life. After Berlin, Leipzig is the second largest city in East Germany and has seen an upward trend in its population numbers for years: In 2019, the city of Leipzig reported over 600,000 inhabitants for the first time, in 2021 already over 605,000[2]. A trend that will continue, according to the Berlin Institute for Population and Development. A forecast showed that Leipzig will be the fastest growing city in Germany – with a full 16% population growth by 2035.

Leipzig has a modern and lively city centre.
Leipzig has a modern and lively city centre.
Many old buildings have been lovingly renovated.
Old factory buildings were often converted into apartments.

Leipzig holds a lot of potential upwards

According to the HWWI[3]/Berenberg[4] city ranking, Leipzig also scores very well in the overall index and comparison of the 30 largest cities in Germany with 2nd place (after Berlin in 1st place). Various aspects such as current economic performance (trend index), future demographic developments (demographic index) and important location factors such as education, innovation, international and accessibility (location index) were examined.

In terms of its economic performance, no other city has been able to improve as significantly and dynamically as Leipzig. And Leipzig is also doing exceptionally well in the trend and demographic index. Prof. Dr. Henning Vöpel, Director of the HWWI, sees significant upward development potential, especially in the location factors of education & innovation, internationality and accessibility[5].

One more reason for investors to take a closer look at the Leipzig region and benefit from this potential. The city not only bundles research and economic potential, it has also gained significantly in attractiveness and quality of life in recent years. A wide variety of districts offer a glimpse of history and culture. Gohlis has many villas and parks, Lindenau with its proximity to the lakes and canals, Plagwitz with its young startup mentality, Connewitz attracts many students and young families. In central Südvorstadt it is colourful, young liberal area. Karl-Heine-Straße is one of the most popular streets in the city for small cafés, pubs, bars, restaurants and many independents for fashion and art etc, are all in close proximity. On balmy summer evenings, the city comes alive with music, events, markets, and out-door eating.

The fact that Leipzig will continue to gain in appeal is not only promised by Burkhard Jung (Leipzig’s Lord Mayor) plans to make the city the most liveable in Germany but will also be visible through various urban redevelopment measures in order to further develop, improve and make individual districts more attractive.

„I praise my Leipzig“

Thus, “Mein Leipzig lob’ ich mir” is not only emblazoned in large letters shining above the Brühl – Leipzig’s large shopping centre, directly between the picturesque main station and the historic old town of Leipzig – but also speaks from the soul of many Leipzigers. According to a survey[6], 77% of respondents said they were very happy in their lives and 65% were optimistic about the future. For the time being, Leipzig was even able to claim the title of “Germany’s happiest city”. And the second lettering “Welcome” on the Brühl also makes it clear how open and forward-looking Leipzig is.

Attractive returns despite a secure future

The vital future of the city seems more than certain, which is also reflected in the Leipzig real estate market. It is obvious that both rental and purchase prices have shifted upwards in recent years. While in 2017 it was still possible to buy for an average of 1,600 euros per square meter, the average price per square meter in the second quarter of 2021 is just under 2,300 euros[7], which corresponds to an increase of 43.75%. It is hardly to be expected that prices will stagnate or even fall in the coming years. Demographic and economic developments are too dynamic.

For investors, the answer to the question “What’s new with you?” should be: A property in Leipzig.

 

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[1] Quelle: Statista 2019 (https://de.statista.com/statistik/daten/studie/6654/umfrage/immobilienpreise-fuer-eigentumswohnungen-in-deutschen-staedten-2008/)
[2] Quelle: https://www.leipzig.de/buergerservice-und-verwaltung/unsere-stadt/statistik-und-zahlen/einwohner-und-bevoelkerungsentwicklung/
[3] Hamburgische WeltWirtschaftsInstitut
[4] Privatbank Berenberg
[5] Quelle: https://www.presseportal.de/pm/56380/4433177
[6] Quelle: https://static.leipzig.de/fileadmin/mediendatenbank/leipzig-de/Stadt/02.1_Dez1_Allgemeine_Verwaltung/12_Statistik_und_Wahlen/Stadtforschung/Kommuale-Buergerumfrage-2020_Vorabbericht.pdf
[7] Quelle: Immoscout

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