Germany’s structure as a Federal state has ensured that its real estate market is characterised by a number of key cities rather than one dominant capital. Berlin, Düsseldorf, Frankfurt, Hamburg and Munich are seen as the Top 5 cities, however international investors are frequently attracted to locations other than these such as Cologne, Dresden, Leipzig or Stuttgart. The reasons for recent growth in German property prices have been a mixture of low borrowing costs, the prospects for economic and rental growth together with reasonably attractive yields. The previous East and West differentiation appears to be vanishing and the top purchase prices are being paid in Munich (the most expensive real estate market in Germany).

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