The cheapest city in Europe?

According to a recent report, the German city of Leipzig is the cheapest city in Europe for property. One of the major reasons of this is that the city still bears the scars from World War 2, with many buildings still riddled with bullet holes. When Germany was reunified in 1990, 25% of Leipzig’s residents chose to uproot and return to the West, leaving a city with a huge surplus of properties and not enough people to fill them. In fact, even today, nearly every street bears a ‘For Sale’ sign and the local council are contemplating knocking down 20,000 apartments to make way for commerical property and roads.

The property surplus means that the prices of the houses are incredibly cheap – a studio apartment will set you back about £7,000, or a two-bedroomed apartment will be about £16,000. There’s nowhere in Europe which offers these sorts of prices, making the city an attractive proposition for foreign property investors. In fact, property prices are so low that you can even buy properties by the block. A block of 8 two-bedroomed apartments is usually priced at around £140,000, making it an attractive propostition. The apartments are smaller than most other European cities, so buying ‘in bulk’ makes sense as you can minimise legal and purchase fees. Many of the blocks will have already been restored, and some will boast features such as swimming pools or saunas.

Even buying a block which needs to be restored can be a good idea – the city has excellent rental potential and there are plenty of tenants looking for long-term leases. Annual yields of 10% net are not uncommon. Once bought, a management company can be hired for £1,200 a year, meaning you can sit back and leave the property to run itself.

German companies such as BMW and Porsche have recently setup hubs in Leipzig, and the city is the centre of trade for international companies such as Amazon and DHL, meanng Leipzig looks to have a bright future. If you only have a small budget, Leipzig is definitely the place of choice to buy – with businesses flocking to the city, it is only a matter of time before the property prices start to increase and you will achieve a superb return on your investment.

If you would like to see a list of properties currently for sale in Leipzig, please click here.

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  1. David Fu | Jun 9, 2011 | Reply

    it posted in 2006 and does the house price is still so low nowaday in 2011? I am interested in Leipzig property and if someone can help me is grateful. Thanks!

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