Are you faced with the decision of purchasing a property in the city or the countryside? This choice significantly affects not only your lifestyle but also the long-term value of your investment. Discover here which factors you need to consider to make the optimal decision for your needs and financial goals.
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The topic briefly and concisely
Property prices in cities are often many times higher than in rural areas, but urban locations generally offer better infrastructure and greater potential for value appreciation.
Rural properties offer more space and tranquility at lower costs, but often require compromises in terms of accessibility and available services.
Additional costs such as property acquisition tax, notary and broker fees, as well as development costs, can significantly affect the overall investment and must be carefully calculated.
The choice of the right property is one of the most fundamental decisions for private real estate owners and investors. Should it be the vibrant city location with its comprehensive infrastructure, or the quiet, nature-oriented rural location with potentially larger plots and lower entry costs? Both options carry specific advantages and disadvantages that go far beyond the mere purchase price. This article highlights the key aspects of properties in urban vs. rural locations, analyses cost structures, infrastructure differences, potential for value development, and quality of life factors. The aim is to provide you with a well-informed basis for decision-making so that you can successfully design your real estate project. An impartial evaluation, as offered by Auctoa, can help you accurately assess the potential of your desired property.
Highlights: City vs. Rural Land at a Glance
The decision between a property in an urban or rural location strongly depends on your individual priorities and financial capabilities. Urban properties often offer better infrastructure and higher potential for value appreciation, but are usually more expensive to purchase. Rural properties provide more tranquility, larger spaces, and often lower prices, but may require compromises in terms of access to services and employment opportunities.
Cost Analysis: A Comparison of Land Prices and Additional Costs
Property prices show a significant disparity between urban centres and rural regions. In the 2nd quarter of 2024, the average price per square metre for land in Germany was €226.34/m². In large cities with more than 500,000 inhabitants, this figure rose to an average of €1,029.44/m², while in communities with fewer than 2,000 inhabitants, it was only €91.70/m². Munich tops the list of the most expensive cities with an average of €2,900/m². The price difference can easily be tenfold.
In addition to the purchase price, ancillary costs are a crucial factor. These include land transfer tax (depending on the federal state, from 3.5% to 6.5% of the purchase price), notary and land registration fees (approximately 1.5% to 2%) as well as possible broker fees (often between 3.57% and 7.14%). Development costs for connection to public networks (water, electricity, gas, sewage) can, for undeveloped plots, which are more commonly found in rural areas, amount to an additional €7,000 to over €10,000. A detailed price comparison is essential. Accurately calculating all costs is crucial before deciding on a plot in an urban versus rural location. A soil survey, which can account for between 0.3% and 0.5% of construction costs, is also recommended to avoid any surprises later on.
Infrastructure and Accessibility: Urban Advantages versus Rural Challenges
Infrastructure is a key differentiator. Cities usually offer an excellently developed infrastructure with a high density of shopping facilities, doctors, schools, and cultural offerings. Public transport is generally well developed, which reduces dependency on private cars. Nearly half of city dwellers (about 49%) are satisfied with public transport, whereas this is only 31% in rural areas. This good connectivity is a clear advantage of urban plots.
In the countryside, the situation is often different. Supermarkets, schools, and doctors are frequently only accessible by car. Satisfaction with mobile and internet services is lower in rural areas at 44% compared to 52% in cities. Although the infrastructure in many rural communities is improving, the car often remains indispensable. This leads to additional costs and time investment for commuters. The importance of infrastructure for property value cannot be underestimated. The decision between an urban versus rural plot should take these aspects into account.
Quality of life and open space: What suits your needs?
The quality of life is subjectively rated very differently. City dwellers often appreciate the wide range of cultural and leisure activities, as well as job and educational opportunities. On average, nine out of ten city residents feel comfortable in their place of residence. The proximity to restaurants, cafés, and a variety of sports facilities is a plus. However, this often comes with higher population density, more noise, and fewer green spaces.
In contrast, country living offers peace, nature, and more space. Properties tend to be larger and offer more room for personal design, such as for a large garden or outbuildings. The possibility of self-sufficiency and a reduced-stress environment is attractive to many. Families with children often appreciate the safer environment and the proximity to nature. The choice between a property in the city or countryside is greatly influenced by personal preferences. Consider which factors are crucial for your quality of life. However, bear in mind that leisure facilities may be harder to reach in the countryside.
Here are some aspects of quality of life in direct comparison:
City: Short distances to culture (museums, theatres), dining, and shopping; often higher noise pollution.
Countryside: Lots of nature and tranquillity, ideal for outdoor activities; possibly longer travel times to specialised services.
City: Diverse job and educational opportunities in close proximity.
Countryside: Potentially fewer local job opportunities, but remote working options partly compensate for this.
City: Smaller plots, denser construction.
Countryside: Larger plots, more privacy, and design options.
Weighing these points will help you find the suitable location for your property.
Performance and Investment Potential: Long-term Perspectives
The development of property and land values shows clear regional differences. In the seven largest German cities, the prices for single-family houses and condominiums rose by up to 2.3% in the second quarter of 2024 compared to the previous quarter. In rural areas, prices also stabilized with an average increase of 0.9% compared to the previous quarter. In the long term, a price increase of 1-3% is expected for residential properties in the German average for 2025, especially in sought-after locations and for energy-efficient properties.
Urban locations, particularly in metropolitan regions, often show a more dynamic value development due to high demand and limited supply. However, the entry prices here are also significantly higher. Rural areas, especially those with good connectivity and quality of life, can also gain in value, often starting from a lower price level. The market analysis for land is complex. For a well-founded decision regarding a property in city vs. rural location, a close examination of local market dynamics and future forecasts is essential. A professional evaluation by Auctoa or using our ImmoGPT chat can help you accurately assess the investment potential.
Factors that influence value development:
Demand development: Rising population numbers in cities often drive prices there.
Infrastructure projects: New transport links or supply facilities can increase the value of rural properties.
Economic development of the region: Strong local businesses increase attractiveness.
Energy efficiency: This factor is becoming increasingly significant for property value.
Development in building regulations: Designation of new construction areas or changes in zoning plans.
You should consider these factors in your long-term planning.
Building law and planning: Differences in approval procedures
The legal building framework conditions and the duration of approval procedures can vary between urban and rural areas, even though state building regulations provide the basic framework. In cities, development plans are often very detailed and restrictive, which can limit the scope for design. The high density of existing buildings and neighbourhood interests can make procedures more complex. The validity period of a building permit varies depending on the federal state, for example, 2 years in Berlin and 3 years in Baden-Württemberg. [:,.]
In rural areas, there may be more flexible building regulations, particularly outside built-up areas (outer area). However, other challenges such as connection to public utilities or environmental requirements may play a greater role here. Clarifying the buildability and specific requirements at an early stage is essential in any case. Regardless of location, it is advisable to obtain comprehensive information before purchasing a property. The complexity of building regulations underscores the value of expert advice to avoid pitfalls when deciding on a property in urban versus rural locations.
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The decision between a property in a city versus a rural location is complex and requires careful consideration of your personal needs, financial capabilities, and long-term goals. Urban properties often offer better infrastructure, higher potential for value increase, and a wide range of cultural and leisure activities, but they come with higher costs and less space. Rural properties provide more tranquility, larger spaces, and lower prices but may involve longer commutes and less developed infrastructure.
There is no universally right or wrong choice. The key is to weigh the factors that matter to you. A data-driven analysis and neutral assessment, like those offered by Auctoa with AI-powered tools and the ImmoGPT chat, can help you uncover hidden costs and evaluate the potential of your desired property optimally. This way, you make an informed decision that lays the foundation for your successful real estate project. Get in touch now for an obligation-free consultation to explore your options.
Additional useful links
The Statistisches Bundesamt offers detailed data on construction prices, property price indices, and land purchase values in Germany.
The Bundesinstitut für Bau-, Stadt- und Raumforschung (BBSR) provides information on different types of housing market regions in Germany (urban-rural).
The Deutsche Bundesbank publishes statistics and an indicator system for the German residential property market.
BORIS.de is the central joint land reference value information system of the German federal states, providing information on land reference values.
The Bundesverband der Deutschen Volksbanken und Raiffeisenbanken (BVR) provides information in a press release about the development of housing prices in metropolises and their detachment from income.
The Deutsche Institut für Wirtschaftsforschung (DIW) analyses the development of purchase prices in the housing market and predicts a potential trend change.
Von Poll Immobilien examines the price differences between rural and urban areas in Germany in a blog article.
FAQ
Are the additional costs lower when buying land in the countryside?
The percentage of additional costs (property transfer tax, notary) remains the same, but as the purchase price in rural areas is usually lower, these are often lower in absolute terms. However, development costs can be higher in rural areas if the property is not yet connected.
How do I find out the standard land value for my desired property?
Land value reference figures are determined by expert committees and can be accessed online via land value information systems (BORIS) of the federal states or directly from the responsible offices.
Does energy efficiency play a role in choosing a property?
Indirectly, yes. While energy efficiency primarily relates to the building, the long-term operating costs and resale value of a property are greatly influenced by it. This can determine the attractiveness of a location, for example, through the availability of district heating or the suitability for renewable energies.
Is a plot of land in the countryside a worthwhile investment?
That depends on the specific situation and development forecast. Rural areas with good connectivity and increasing demand can indeed generate attractive returns, often with a lower capital investment than in the city. A thorough <a href="/blog/marktanalyse-grundstuck">market analysis</a> is crucial.
How long does it typically take to obtain a building permit?
The duration for obtaining a building permit varies significantly depending on the federal state, the complexity of the project, and the workload of the authorities. It can take from a few weeks to several months. In the simplified procedure, it is often quicker. [:]
Can Auctoa help me evaluate a property in an urban or rural location?
Yes, Auctoa offers fast and neutral, AI-supported real estate evaluations. Our ImmoGPT chat can also provide initial assessments and answers to your questions about the property's location, helping you to better understand its potential and possible risks.
