Real Estate

When a house in the surrounding area pays off

Modern family houses
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A house with a garden – in the big city, this dream is priceless for most people. Take Cologne, for example: In the metropolis on the Rhine, a square meter currently costs around 3477 euros if buyers opt for a property from the portfolio. For new buildings, future owners have to put an average of 4929 euros on the table, according to an analysis by the financial services provider Kampmeyer. Tenants hardly have it better: rents in the metropolises have risen in sync with purchase prices. Families in particular are less and less able to afford life in the big city.

At the latest when children are out and about, many Germans are therefore flirting with moving to the cheaper surrounding area. Houses and apartments are still affordable in the suburbs of the metropolises, and rents are usually well below those in the big city. The catch: jobs in the immediate vicinity are rare, new jobs are mainly being created in cities. People wishing to move are therefore often forced to commute. Around 40 percent of German citizens travel to another district to work, according to Postbank’s “Housing Atlas 2019”. In doing so, they accept longer and longer distances. On average, working people in Germany commute around 10.5 kilometers to work, according to a study by the Institute for Employment Research from 2018. At the turn of the millennium, it was around a quarter less at 8.7 kilometers. The reason is simple: the more decentralized the place of residence, the more affordable the prices become.

Some people willing to move may tempt the low property prices in the surrounding area to push the commute distance to the limit of pain. However, this often turns out to be a milkmaid bill, warn experts from the Hamburg World Economic Institute (HWWI). Because daily commuting is expensive. At first glance, the cost of petrol or the public transport ticket seems to be negligible compared to savings when buying a house in the surrounding area compared to the big city. Over the years, however, a considerable amount can accumulate.

A good rail connection pays off

On behalf of Postbank, the HWWI investigated when it pays off for commuters to buy cheap real estate in the surrounding area – and when they start paying more than a city apartment. The experts compared buying an expensive 70-square-meter apartment with buying an apartment in a town in a nearby district. The result: those who commute to work by car pay more in most districts after 20 years at the latest than if they had stayed in the big city. “A good rail connection is therefore essential for commuters,” says Eva Grunwald, Head of Real Estate at Postbank.

According to the study, working people who commute to work by bus and train benefited the longest from the financial benefits. According to the model calculation, they drove for at least 40 years cheaper in all of the districts examined before the costs of commuting consumed the benefits of buying a cheaper house.

The most commuter-friendly city according to the ranking is Langen in the Rhine-Main area. Those who live in the tranquil town and commute 220 days a year by train to Frankfurt am Main, 22 kilometers away, travel for 61.9 years more cheaply than non-commuters. Neuss (52.7 years) and Dachau (52.4 years) follow in second and third place. The Stuttgart area is at the bottom of the ranking. There, commuters have used up their savings after a maximum of 30 years – if they take the train. If you put yourself behind the wheel, you can use the money you save within 16 years.

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