The present text is intended to inform the reader about the city of Chemnitz as a real estate location. In addition to the potential that is in the housing real estate, the situation of the office market as well as the retail trade should also be addressed. Finally, the opportunities for investors and project developers who opt for the Chemnitz site are summarized.
The real estate location Chemnitz – A modern city in the east of the Federal Republic of Germany
Contrary to the behavior, which prevails among many investors, to avoid Chemnitz as a real estate location, it is the case that the town on the Erzgebirge offers cheap housing, which in the long term is also easy to rent. Even though the city does not enjoy a really good reputation these days, it is, to the surprise of many, one of the cities in East Germany with the highest income. Chemnitz therefore has the potential to be an attractive real estate location, at least with regard to the income situation.
Progressive urban development and strengthening of the economy
Chemnitz has about 247,000 inhabitants, making it the third largest city in the state of Saxony. After declining trends in the population of the Saxon city, this trend has reversed in the recent past. Since 2012, an increase in the population of Chemnitz can be observed. More than 780,000 people live in the entire catchment area. Another advantage is the decline in the unemployment rate. It sank and is currently below the unemployment rate of Leibzig in order to draw a direct comparison with another East German city. A look at the companies based in Chemnitz reveals that leading companies such as Siemens VDO, IBM, Thyssen-Krupp and the Union der Werkzeugmaschinen GmbH.
Apart from these global players or global corporations, the city of Chemnitz is an extremely important location for research and development. The most important area covered by Chemnitz is that of microsystems technology. Furthermore, downtown Chemnitz is undergoing a redesign, which in turn has a positive impact on the residential real estate market. More in the following paragraph.
A look at the market of residential real estate in the city of Chemnitz
First of all, the redesign of Chemnitz city center should be seen as a positive influencing factor for the residential real estate market. In addition, the neighborhoods adjacent to the city center are being upgraded by this redesign. This development will make B- and C-locations in Chemnitz more attractive to investors. It can be observed that the price trend is upward. The same picture can also be seen in the rents, which are also rising. At the moment, the purchase price of a standard residential property is 750 euros to 850 euros per square meter. For a good residential real estate instead 850 euros to 1,000 euros per square meter are due when a decision is made for a purchase. For high-quality residential real estate, the price per square meter is between 2,600 and 2,800 euros.
In terms of rental prices, standard residential properties are currently being leased in Chemnitz for € 4.50 to € 5.00. The good residential real estate is rented for 5.50 euros to 7.00 euros and those properties that are characterized as high-quality, between 8.00 euros and 10.00 euros per square meter. It should also be mentioned at this point that the Kitzberg district of Chemnitz is very popular and therefore new building measures are being carried out to meet the increasing demand for living space. The long-term trend, based on the price development of residential real estate in Chemnitz, is estimated by experts to be consistent, with the population of the Saxon city, a trend is certified. At least now investors should sit up and take notice. There are also interesting developments in the office and retail market, which should be looked at in the next paragraph.
The retail and office real estate market
Despite stagnating prices for retail space in Chemnitz, an investment in retail space is considered a safe investment, which in good conditions can yield attractive returns of six to seven percent. The prices of retail space in prime locations are currently around € 60.00 per square meter for areas smaller than 120 square meters. For larger retail space Chemnitz pay 30.00 € per square meter.
The office space market saw a slight increase in rents in the past year. For offices, located in top La
