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Where (and why) demand for holiday homes in Germany is rocketing

Second homes in the mountains or on the coast of Germany were already in demand before the coronavirus crisis. Now the pandemic is increasing the desire for people to keep distance in their own vacation property.

Where (and why) demand for holiday homes in Germany is rocketing
Holiday homes near the Baltic Sea in Timmendorf, Mecklenburg-Western Pomerania in July 2020. Photo: DPA

A house by the lake, an apartment with a view of the sea or a retreat in the mountains: long before the coronavirus crisis, vacation properties were the dream of many people.

The second home or the weekend cottage promised distance from everyday life, peace from the confines of the city and more greenery. In coronavirus times, the desire for such a setup is surging. 

“The demand for vacation properties is definitely higher than before the crisis,” says Daniel Ritter, managing partner at the broker von Poll. “The desire to escape from the city into nature and be able to avoid contacts has increased even more.” 

The prices, for example, for the coveted holiday apartments on the North Sea islands, which already cost upwards of 10,000 per square meter before the pandemic, rose again by around 20 percent in 2020.

Demand continues to bubble up in holiday regions such as the North and Baltic Seas, the Alps and the Black Forest, said Ritter.

“In the coronavirus crisis, however, regions that are overshadowed by the top destinations are also becoming more popular, for example the Eifel, Moselle, Spreewald and Mecklenburg Lake District.” 

READ ALSO: Travel: Six reasons why the Spreewald near Berlin is worth visiting

They benefit from being close to cities such as Frankfurt, Düsseldorf, Cologne and Berlin. In general, accessibility is an issue in the pandemic: “The desire for air travel is not so great,” said Ritter, pointing out that the virus has strengthened the domestic market.

A holiday home in Kirchdorf, Mecklenburg-Western Pomerania. Photo: DPA

The broker Engel & Völkers is also seeing more interest in holiday properties in Germany.

“Demand on the North Sea and Baltic Sea coasts as well as in the Alpine regions and on the southern German lakes has increased significantly as a result of the coronavirus pandemic,” said board member Kai Enders. 

Growing prices in sales and rentals confirm this, and domestic holidays – when restrictions allow for them – are also booming.

Demand grows for well-connected getaways

Particularly popular are quiet, secluded small towns and locations that offer enough space for distance and yet good connections – for example to medical facilities and fast internet, said Enders.

But those who want to buy a holiday home in hotly sought-after holiday areas have to bring a lot of money with them. Engel & Völkers listed the highest prices for holiday homes on Sylt.

On the fashionable North Sea island, holiday homes in very good locations cost up to 20,000 per square metre. This level is also reached on Norderney as well as on Tegernsee and in the Starnberger Fünf-Seen-Land, according to the broker.

In addition, properties in the price segment of around 150,000 are also popular. Clients from the city, for example, were very interested in properties in the northernmost state of Schleswig-Holstein, which they could buy with equity without a loan. It unsurprisingly gets cheaper when the coast is no longer in sight.

“If the water is no longer visible and you accept a few minutes’ drive, you have a completely different price level,” said Ritter.

However, quiet, secluded holiday homes are no longer only in demand for holidays in coronavirus times.

“We are observing the trend that holiday homes and second homes are also increasingly being used for remote working,” said Engel & Völkers. 

The pandemic, which has led to the cancellation of business trips and physical client appointments, makes it possible.

READ ALSO: Weekend Wanderlust: How to travel the world without leaving Germany

Are holiday homes a good longtime investment?

However, there are some pitfalls when buying holiday homes, says Mathias Wahsenak, managing director of Landesbausparkassen Immobilien GmbH in Potsdam.

In principle, not all holiday properties can be rented out, explained Wahsenak. And the top locations on the coast are stable in value, but also expensive. 

“It’s only worthwhile to a limited extent as an investment, more as a place to park money,” he said.

Many two-and three-bedroom flats and holiday homes are sold, some of which are owner-occupied and some of which are rented out.

In view of low interest rates and the booming German holiday market, the supply is scarce. Older existing properties are available from about 2,000 per square metre, while new builds start at just under 4,000.

The Spreewald, an up-and-coming holiday home destination, in January. Photo: DPA

The management costs, which make up 20 to 30 percent of the rental income, should not be underestimated, said Wahsenak. To make the investment worthwhile, the holiday home should be rented out 120 to 150 days a year.

Looking beyond the holiday season

Quiet, remote locations are particularly popular. It becomes more complicated with holiday homes outside of Germany, for example on the Mediterranean.

“The legal security, the notarisation of the purchase contract, our land registry system and building laws are not always available abroad. As a hobby, a purchase could be worthwhile, but best with an expert by your side.

“If you go off on your own abroad, you can get a nasty surprise,” said Wahsenak.

Washenak also advised touring the holiday region outside the peak season, because the dream of a second home does not always stand up to reality. 

“Often, new owners are surprised to find that many shops, bars and restaurants are not open in the off-season,” he said. “When there are no lights on in the place and everything is barricaded up, gloom can quickly set in.”

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Five of Germany’s most magical Christmas Markets to visit in 2021

Despite rising infection numbers, most of Germany’s Christmas markets will be open to fill our hearts with festive cheer this year. We give you a rundown of five of the country’s most magical Christmas markets.

Five of Germany's most magical Christmas Markets to visit in 2021
The entrance to the Stuttgart Christmas market in 2019. Photo: picture alliance/dpa | Tom Weller

In 2020, many Christmas markets in Germany had to close or were scaled back massively because of the pandemic. This year – at least at the time or reporting – lots of markets are set to open in the coming weeks. 

Here are five we love at The Local Germany. If you have any suggestions for magical Christmas markets in Germany, please leave a comment below. 

Maritime Christmas Market on the Koberg, Lübeck

Lübeck, the so-called “Christmas city of the North”, will be welcoming the festive season this year by lighting up its old town with over 500,000 Christmas lights.

The northwest of the old town island is where you’ll find the maritime-themed Christmas market which has been going since 2011.

Centred around the gothic, middle-aged church of St. Jacob, this Christmas market celebrates the city’s historical sea-faring residents by creating a cosy harbour atmosphere with old wooden barrels, nets and a stranded shipwreck as well as a Ferris wheel with an unforgettable view of Lübeck’s old town and harbour.

Culinary stands offer visitors sweet and savoury dishes, and beverages such as hot lilac punch, mulled wine and, of course, rum.

Extra info: The current rules for events and hospitality in Schleswig Holstein is that 3G applies (entry for the vaccinated, people who’ve recovered from Covid or people who show a negative test)  but from Monday, November 15th, indoor areas will be enforcing the 2G rule (excluding the unvaccinated).

The Christkindlesmarkt in Augsburg Photo: picture alliance / dpa | Karl-Josef Hildenbrand

Christkindlesmarkt, Augsburg

With its origins in the 15th century, the Christkindlesmarkt in Augsburg is one of the oldest in Germany, and the Renaissance town hall provides a particularly beautiful backdrop to this winter wonderland.

As well as a wide variety of stands selling handcrafted nick-nacks and tasty treats, the Augsburg market also has some especially magical features, including the “Heavenly Post Office,” and “Fairytale Lane”: an animated fairytale depicted in ten scenes in decorated shop windows around the market place.

Extra info: In order to keep dense crowds to a minimum, the Angel performance will not take place this year. The market will also be spread out over more locations in the historic centre and there will be fewer mulled wine stands than in previous years. The stalls will be distributed over the Hauptmarkt, Lorenzer Platz, Schütt Island and Jakobsplatz.

Meanwhile, masks will have to be worn due to the high Covid numbers in Bavaria – and there will be 2G rules around the mulled wine stands, meaning unvaccinated people will not be served alcohol.

READ ALSO: State by state – Germany’s Covid rules for Christmas markets

Medieval Market and Christmas Market, Esslingen

The Medieval Market and Christmas Market in Esslingen, with its backdrop of medieval half-timbered houses, offers visitors a trip back in time, with traders and artisans showing off their goods from times gone by.

The stands show off the wares of pewterers, stonemasons, blacksmiths, broom makers and glass blowers, as well as some old-fashioned merchants selling fun themed goods like drinking horns and “potions” in bottles.

Extra info: This year the number of stands will be reduced from more than 200 to around 120 and the stage shows, torch parade and interactive activities will not be taking place.

View from above the historic Streizelmarkt in Dresden. Photo: picture alliance/dpa/dpa-Zentralbild | Robert Michael

Streizelmarkt, Dresden

No Christmas Market list would be complete without the Streizelmarkt – Germany’s oldest Christmas market in the “Florence on the Elbe”.

This market, which you will find in Dresden’s city centre, first took place in 1434, and since then it has acquired quite a reputation.

The ancient market is home to the tallest Christmas pyramid in the world, as well as the world’s largest nutcracker.

Amongst the dozens of traditional stands, visitors to this market must also try the Dresdner Christstollen: the famous fruit loaf that is baked according to a traditional recipe with chopped dried and candied fruits, nuts and spices and dusted with powdered sugar.

Visitors can also take a ride on the historic Ferris wheel and gaze down upon the lovingly decorated huts of the Striezelmarkt.

Extra info: This year there will be no stage program and the mountain parade has been cancelled.

Old Rixdorf Christmas Market, Berlin

Although not as well-known as some of Berlin’s other Christmas Markets, the Old Rixdorf Christmas market is a romantic and magical spot which is well worth a visit. In the south of city in Richardplatz, Neukölln the old village of Rixdorf was founded in1360.

This charming setting is home to historic buildings such as the Trinkhalle and the Alte Dorfschmiede, and is illuminated every year with kerosene lamps and fairy lights. The stalls and booths are run by charitable organizations and associations. There are homemade trifles and handicrafts, but also culinary delights such as fire meat, waffles, pea soup, and numerous varieties of mulled wine and punch.

Extra info: The Old Rixdorf Christmas Market will be following the 2G model, meaning that all visitors over the age of 12 will be required to be fully vaccinated or recovered from Covid-19.