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EXPLAINED: The grocery products in Germany getting more expensive

Everyone is talking about consumer prices rising in Germany. What does it mean in real life?

Published: 23 March 2022 17:34 CET
A customer with a €5 note. Products are getting pricier in Germany.
Readers of The Local shared their inflation-busting tips. Photo: picture alliance/dpa | Moritz Frankenberg

Inflation keeps going up – and on Wednesday the Munich-based ifo institute, said it expected consumer prices to rise from 5.1 to 6.1 percent in March – which would be the steepest rise in consumer prices since 1982.

It comes as residents have already been feeling the pinch at the checkout (and on energy bills) over the last few months with the cost of living spiralling upwards. And Russia’s war on Ukraine is exacerbating the issue further. 

READ ALSO: German consumer prices set to rise steeply amid war in Ukraine

According to research by German site Focus Online and trade publications like the Lebensmittel Zeitung, several supermarkets are reacting by pushing prices up further. 

Experts say that Aldi and Lidl tend to set the tone in German supermarkets because they are among the most important customers for the likes of farmers, manufacturers and distributors. 

Last week, Aldi Süd and Aldi Nord increased the price of about 140 items in their standard assortment. Adding flavours, sizes and other variations of these items, the number quickly climbs to 400 products.

A spokesperson for Aldi Nord and Aldi Süd said the market had been strained for months by challenges including the Omicron wave of Covid-19, the international shortage of truck drivers and the increased costs for energy and raw materials.

READ ALSO:

“The situation has been exacerbated by the war in Ukraine,” said the spokesman. As part of the discounter model, Aldi reduces sales prices when purchase prices fall and increases sales prices when purchase prices rise.

“We would like to point out that our margins do not change as a result of this move,” said the spokesman. 

According to Focus Online, discounter giant Lidl also recently raised the prices of branded products, while there have also been noticeable increases at Rewe and Edeka.

Which products are you paying more for?

According to Focus, the prices of several food and drugstore items have massively increased since the end of January 2022.

Some of the price hikes on products include:

Pasta (up to 40 percent increase)

A supermarket employee in Offenburg stocks pasta in 2020. Pasta has been increasing in price in Germany.

A supermarket employee in Offenburg stocks pasta in 2020. Pasta has been increasing in price in Germany. Photo: picture alliance/dpa | Patrick Seeger

Detergents (up to 20 percent)

Mineral water (over 10 percent)

Dairy products (up to 5 percent)

Coffee (up to 10 percent)

Paper handkerchiefs (up to 15 percent)

Toilet paper (up to 10 percent)

Kitchen roll (up to 20 percent)

Sunflower oil (up to 100 per cent)

READ ALSO: Germans urged not to panic-buy over shortage fears

In most cases, prices per product increased between five and 50 cents.

One example is mixed bio mince from Aldi Süd. While the 400-gram tray cost €3.59 in January, customers now pay €3.99 for it. At Rewe, customers now pay around €5.59 for mixed organic mince instead of €4.99 (January 2022).

The mineral water from own-brand Quellbrunn no longer costs 19 cents at Aldi, but a hefty 25 cents. Rewe seems to have followed suit. Those who put the mineral water from their label “Ja” in their shopping trolley now pay 25 cents for the 1.5-litre bottle at the checkout.

Meanwhile, price hikes for sunflower oil and rapeseed oil are particularly steep.

While last year customers paid between 89 and 99 cents for a bottle of oil, the product now costs up to €1.99 from some retailers. This is of course down to production and harvest stagnating because Russia is waging a brutal war against Ukraine.

A purchasing manager of a well-known discounter told Focus Online: “It’s possible that customers will soon have to pay over three euros for a bottle of sunflower oil.”

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PROPERTY

Who pays broker’s fees on property in Germany – and how much do they cost?

One of the major hidden costs of buying and selling property in Germany is the estate agent's commission, or broker's fee. We look at some of the unusual rules around it - and how much you can expect to pay.

Published: 17 September 2024 16:25 CEST
Who pays broker's fees on property in Germany - and how much do they cost?

There are many areas of life in which things in Germany function just that little bit differently – and buying a house is no exception.

Though the buoyant property market in the Bundesrepublik makes it an attractive place to buy, anyone looking to get their foot on the housing ladder should consider the hidden fees they might incur.

Beyond interest rates, taxes and fees for notaries and translators, one major outlay is the estate agent’s commission, which can sometimes stretch to thousands of euros.

Here’s what to know about these hefty fees and how you might be able to lower them. 

Who pays commission on property transactions in Germany?

If you come from another European country or somewhere like the United States, you may be used to a system in which the seller pays the broker’s fee. This intuitively makes sense because the estate agent is there to market the property, liaise with buyers and ultimately get the best price for the seller – so it makes sense that the seller should pay for these services.

Until recently, however, it was the buyer who was responsible for paying the entirety of the estate agent’s commission in Germany. That meant that these fees – which could be as high as seven percent of the purchase cost – were added to the mountain of extra costs buyers had to contend with, from notary fees to land transfer tax.

READ ALSO: The hidden costs of buying a house in Germany

Luckily for buyers (but less so for sellers), this was changed under a law that came into force at the end of 2020. Since then, costs are generally split 50/50 between buyers and sellers.

However, there are some details that are important to note here. If the seller commissions the estate agent to help them sell their home, they are technically liable for the costs but must pay a minimum of 50 percent. 

If the buyer commissions the estate agent to find them a home, the same rules apply the other way around: the buyer is liable for the costs but can obtain a maximum of 50 percent from the seller.

In each case, the side that commissioned the broker must prove they have paid their share before the other side is liable to pay theirs. 

How much do estate agents’ fees cost in Germany?

Commission on property sales varies from state to state but is generally set at between 5 and 7 percent of the purchase price.

According to online portal ImmobilienScout24, these were the standard rates that applied in each of the federal states in 2024, with the number in brackets representing a 50 percent share of the costs:

Baden-Württemberg: 7.14 percent (3.57 percent)

Bavaria: 7.14 percent (3.57 percent)

Berlin: 7.14 percent (3.57 percent)

Brandenburg: 7.14 percent (3.57 percent)

Bremen: 5.95 percent (2.97 percent)

Hamburg: 6.25 percent (3.12 percent)

Hesse: 5.95 percent (2.97 percent)

Lower Saxony: 4.76 – 5,95 percent or 7.14 percent, depending on the region. (2.38 – 3.57 percent)

Mecklenburg Western-Pomerania: 5.95 percent (2.97 percent)

North Rhine-Westphalia: 7.14 percent (3.57 percent)

Rhineland-Palatinate: 7.14 percent (3.57 percent)

Saarland: 7.14 percent (3.57 percent)

Saxony: 7.14 percent (3.57 percent)

Saxony-Anhalt: 7.14 percent (3.57 percent)

Schleswig-Holstein: 7.14 percent (3.57 percent)

Thuringia: 7.14 percent (3.57 percent)

If it’s hard to gauge how much this means in real terms, we can take the example of two properties: a €200,000 apartment and a €500,000 family home.

In the state of Hesse, a buyer splitting the broker’s fee equally with the seller would pay €5,940 to buy the €200,000 apartment and €14,850 to buy the €500,000 house.

In pricier Berlin, meanwhile, the same buyer would pay €7,140 on the €200,000 apartment and €17,850 on the €500,000 house.

READ ALSO: Is autumn 2024 the right time to buy a property in Germany?

Here’s where it gets more complicated, however: under German law, you are technically free to negotiate the commission with your estate agent.

That means that, especially in areas with stiff competition, you may be able to secure a better deal. 

Do I always have to pay commission in Germany? 

Not always. In fact, as a seller, you’re perfectly free to sell your property privately without enlisting the help of a real estate agent.

The benefit of this, of course, is that you can potentially save thousands of euros in fees, both for yourself and any prospective buyer. 

On the flip side, though, you will need to take the entire job of the estate agent on yourself, from marketing the property to liaising with potential buyers and finally closing the deal.

Real estate agent Germany

A real estate agent talks to prospective tenants at an apartment viewing. Photo: picture alliance/dpa | Tobias Hase

There can also be some upfront costs involved in commissioning things like floor plans and professional photography, as well as the time you’ll need to invest in learning all the procedures and preparing relevant documents for notary – to name just a few examples.

Ultimately, though, it’s up to you to decide whether the expense of working with a professional broker is worth it in the end. 

As a buyer, there are also some situations where you’ll see the words ‘provisionsfrei’ – or commission-free – written in a property listing.

This is fairly common in new-build properties, where the developer may sell the homes directly to interested buyers. More rarely, an existing property may be listed without commission, making it a more attractive proposition.

In both cases, it’s possible that commission has been built into the purchase price, so you may not necessarily be getting a better deal.

Another case where you’re likely to be able to avoid commission as a buyer are so-called Kapitalanlagen – or buy-to-let properties. 

READ ALSO: Should you think about purchasing a buy-to-let property in Germany?

These tenanted properties are designed to be bought as investments: buyers can enjoy additional rental income over time and, ideally, will also make money when they come to sell the property several years later.

For this reason, costs are generally kept slightly lower for the buyer by eschewing the standard broker’s commission. 

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