Leipzig is Germany’s fastest growing big city with purchase prices under half of Hamburg, renovated Wilhelminian quarters and a 4.2 percent rental yield. Salaries are low, purchasing power too, and that is exactly the investors’ calculation.
Buy or rent?
24.1 years of rentpurchase price divided by annual cold rentBelow 25 the ratio favours buying: the rent almost covers the mortgage payment on its own.
milinia’s take
- Purchase prices €2,600 per square metre, Zentrum-Süd, Gohlis and Schleußig over €3,800, Grünau and Paunsdorf around €1,800.
- Transfer tax 5.5 percent since 2023, trade tax multiplier 470, property tax 650.
- Salaries 20 percent below the west, purchasing power index 90; rents at €9 still bearable.
- Rental yield 4.2 percent, above 5 in Grünau and Lindenau, vacancy under 5 percent.
Living
Existing flats cost €2,600 per square metre, in Zentrum-Süd, Gohlis, Schleußig and the Waldstraßenviertel over €3,800, in Grünau, Paunsdorf and Mockau around €1,800. New lettings at €9 excluding utilities, in Plagwitz, the Südvorstadt and Connewitz €11 to €13. Leipzig has grown from 500,000 to 630,000 inhabitants and pushed vacancy from 20 percent in 2000 to under 5 percent. The Wilhelminian stock is 90 percent renovated. The correction since 2022 came to around 10 percent.
Earning
Median €3,600 gross, above that in car plants, logistics and the chip industry under collective agreements, well below in services, culture and hospitality. Purchasing power index 90. The salary gap to the west sits at 20 percent and closes slowly; chipmaker settlements in Dresden and battery factories in the region draw specialists.
Taxes and levies
Saxony raised transfer tax from 3.5 to 5.5 percent in 2023 and thereby lost the Bavarian advantage. Trade tax multiplier 470 percent, property tax multiplier after the reform 650. Church tax 9 percent with church membership under 20 percent.
Investing
The gross yield sits at 4.2 percent, in Grünau, Lindenau and Reudnitz above 5. Leipzig has been eastern Germany’s investors’ market since 2010: high yield, rising demand, prices still below replacement value. The risks are vacancy in prefab estates, dependence on inflows and salaries that cannot carry rent increases above 3 percent a year. Whoever buys takes renovated Wilhelminian stock in Gohlis, Reudnitz or Lindenau and counts on rent, not on a price jump.
milinia’s view
Leipzig is the city where €100,000 of equity still buys a three-room flat. Whoever wants yield and understands eastern Germany finds the best figure of the twelve here.
Try it yourself
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