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Frankfurt

Frankfurt is Germany's financial capital, home to the European Central Bank and major international banks.

Editorially reviewed

€6.800

Avg. Price/m²

3.1%

Rental Yield

753K

Population

6%

Transfer Tax

Frankfurt am Main is the undisputed financial capital of Germany and continental Europe, hosting the European Central Bank, the Bundesbank, and the headquarters of major commercial banks. With a highly international workforce, Europe's fourth-busiest airport, and ongoing demand driven by post-Brexit banking relocations, Frankfurt offers strong fundamentals for property investors seeking exposure to Germany's most global city.

Real Estate Market Overview

Frankfurt's property market is heavily influenced by the financial services sector, which drives demand for both premium and mid-range rental apartments. The city has one of the most international populations in Germany, with over 30% of residents holding foreign passports, creating unique demand for high-quality rental housing. The Grunderwerbsteuer in Hessen is 6.0%, which is above average but in line with other major German cities. Post-Brexit relocations from London have brought thousands of banking professionals and their families, significantly boosting demand in premium districts. Frankfurt's compact city center and limited land supply constrain new construction, supporting price stability.

  • Over 30% of Frankfurt residents are international, creating strong demand for quality rental apartments near the financial district and international schools
  • Post-Brexit banking relocations have added thousands of high-income tenants, with major institutions like Goldman Sachs and Morgan Stanley expanding their Frankfurt offices
  • Frankfurt Airport, Europe's fourth-busiest, makes the city a hub for international business travelers and corporate housing demand

Best Neighborhoods for Investment

Frankfurt's investment-worthy neighborhoods cluster around the banking district and along the Main river, with some emerging areas offering value opportunities as the city's growth radiates outward.

  • Westend: Frankfurt's premier residential district adjacent to the banking quarter, commanding the highest rents from senior banking professionals and executives
  • Nordend: Trendy and family-friendly with excellent Altbau stock, popular with mid-career professionals seeking a balance of urban living and green spaces
  • Sachsenhausen: The charming south-bank district known for Apfelwein pubs and the Museumsufer, attracting a mix of young professionals and long-term residents
  • Bornheim: The 'little Montmartre' of Frankfurt with a vibrant high street, offering more affordable entry points with strong rental demand from students and young professionals
  • Gallus & Europaviertel: Former industrial area transformed into a modern mixed-use district, offering new-build investment opportunities near the main station

Investment Process

Frankfurt's investment property market is sophisticated and competitive, with many international buyers and institutional investors active in the market. Individual investors can still find opportunities, particularly in the mid-range segment.

  1. Step 1: Research the market and define your target segment; Frankfurt rewards specialization, whether in banking district studios or family apartments in residential neighborhoods
  2. Step 2: Arrange financing with a Frankfurt-based bank experienced in investment property; international buyers may need to provide higher equity (30-40%)
  3. Step 3: Partner with a Makler who specializes in Kapitalanlage and understands the specific dynamics of Frankfurt's international rental market
  4. Step 4: Conduct due diligence focusing on the Mietspiegel (rent index), current Mietvertrag terms, and potential for Mieterhöhung (rent increases)
  5. Step 5: Close the transaction through a Notar, budgeting approximately 10-13% for Kaufnebenkosten (6.0% Grunderwerbsteuer plus notary, registry, and broker fees)

Tips

  • •Target apartments suitable for corporate relocation tenants, as companies often pay above-market rents for quality furnished apartments near the banking district
  • •The Europaviertel near the Hauptbahnhof is still developing and offers new-build properties at prices below Westend, with strong appreciation potential as the area matures
  • •Frankfurt's international schools cluster in Sachsenhausen and the western suburbs; proximity to these schools is a key driver of demand for family-sized apartments

Frequently Asked Questions

What is the Grunderwerbsteuer rate in Frankfurt?

Frankfurt is located in the state of Hessen, which has a Grunderwerbsteuer (property transfer tax) rate of 6.0%. This applies uniformly across all property purchases in the state and is payable within one month of the notarized purchase contract.

How have post-Brexit banking relocations affected Frankfurt's property market?

Post-Brexit relocations have significantly boosted demand, particularly in premium districts like Westend and Nordend. Major banks including Goldman Sachs, Morgan Stanley, JPMorgan, and Citigroup have expanded their Frankfurt offices, bringing thousands of well-paid employees who need high-quality rental housing. This has pushed rents up in central districts and increased demand for furnished apartments.

Is Frankfurt suitable for buy-to-let investors?

Frankfurt is excellent for buy-to-let investors due to its international workforce, corporate tenant demand, and limited housing supply. The key is to choose locations close to the banking district or well-connected by S-Bahn. Gross rental yields in Frankfurt typically range from 3-4%, with potential for premium returns from furnished or corporate-let properties.

Hesse

Transfer Tax: 6% • Population: 6.3M

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