The Engel & Völkers real estate lexicon

The activity index for real estate puts the number of transactions of flats or houses in relation to their total stock in a defined area (e.g. city, region, federal state). If the number is lower than in the previous year, fewer properties have been traded.

The asking rent is a non-negotiated rent advertised by the owner for the rental property.

The asking price is a price demanded by the owner for the property and thus advertised in exposés.

All employees subject to social insurance contributions whose place of work is different from their place of residence are referred to as commuters. The municipality or district boundary defines the place of work or residence. If employees subject to social insurance contributions have to travel from their place of work to their place of residence, they are referred to as out-commuters.

The construction completion figure indicates the number of all housing units completed in the reference period.

A building permit is issued by a building supervisory authority and describes, in public building law, a permit with which a building project can be realised, changed or removed without objection.

The building intensity provides information on how many new dwellings were completed within a certain period of time. It also reflects new construction activity and can be expressed in housing units per 1,000 inhabitants.

The construction price index shows the development of construction prices, which allows, for example, price changes to be measured and forecasts to be made. For this purpose, values from a fixed base year are used as a comparison.

A property developer is a company that builds a residential or commercial property on a plot of land. If the land and the property to be built are owned by the developer, the developer acts as a builder throughout the process and pursues the goal of selling both to a purchaser.

Employees subject to social insurance contributions are all employees who are covered by health, pension and nursing care insurance and/or who are required to pay contributions under the Employment Promotion Act or who pay into the statutory pension insurance scheme. This also includes trainees, employees in partial retirement, interns, working students, people with disabilities in recognised workshops or similar institutions, as well as persons in the Federal Volunteer Service or who voluntarily complete a social/ecological year. Civil servants, self-employed persons and domestic workers, however, do not count as employees subject to social insurance contributions.

Existing buildings are properties that were completed more than three years ago.

In the real estate industry, operating costs are all those costs that arise from the use of the property. The property consists of the land and all buildings or facilities on it. Management costs as well as maintenance and repair costs do not count as operating costs.

The purpose of a population forecast is to estimate the future number of inhabitants. In order to obtain as accurate an estimate as possible regarding the future population, several external country forecasts are combined. These country forecasts are broken down to the individual municipality levels, which makes it possible to show more comprehensible regional developments.

The gross return puts the return on an investment in relation to the capital, without including taxes and costs. To calculate the gross yield, the annual net cold rent is divided by the purchase price. This benchmark provides a point of reference for researching and comparing properties on the market.

Demographic development describes the composition of the age structure in society and the changes it is undergoing. In Germany, the average age is shifting upwards, i.e. society is ageing more and more.

With the help of monument protection, culturally historic properties are to be protected and preserved in the long term. Numerous conditions must be observed for a listed property. If changes are to be made to the property, they must always be agreed with the respective heritage protection office. The heritage office also decides whether a property meets the requirements for heritage protection.

A semi-detached house consists of two houses built side by side, each with its own entrance and usually occupied by two different households. A semi-detached house (DHH for short) therefore refers to one of the two properties built next to each other. In statistics, semi-detached houses are usually added to detached and semi-detached houses (EFH/ZFH).

If ownership of an individual flat within a multi-family house can be acquired, this is called a condominium (condominium for short). A condominium is thus legally independent and counts as condominium ownership under German law.

In contrast to a multi-family house, a single-family house (EFH for short) has only one residential unit. Primarily, a single-family house refers to a property that is single and detached on a plot of land. However, semi-detached houses or terraced houses, for example, can also be included in this category for statistical purposes.

Employees subject to social security contributions whose place of work is different from their place of residence are referred to as commuters. The municipality or district boundary defines the place of work or residence. If employees subject to social insurance contributions have to travel from their place of residence to their place of work, they are referred to as commuters.

The affordability index can be used to determine whether an ordinary household can afford a property. Various factors such as interest rates and salaries are combined and evaluated. The higher the value in the affordability index, the more likely the property is to be affordable for the respective household.

A dwelling is considered completed when all construction work has been largely completed so that it is ready for occupation. When collecting the data, a distinction is made between residential and non-residential buildings. In a residential building, at least half of the floor space must be used for residential purposes. If less than 50 percent of the total floor space is used for residential purposes, it is a non-residential building. This also applies to flats in detached, semi-detached and multi-family houses.

If a main residence is officially deregistered, this counts as a departure.

A household consists of at least one person and is also referred to as an economic unit. A distinction is made between public and private households and establishments.

The household forecast is based on the population forecast. Currently, the average household size in Germany consists of about two persons. In order to provide an estimate of the future population or households that is as accurate as possible, several country forecasts are combined.

Households differ, for example, in the number of persons or the relationship situation of the household members. This gives rise to different household structures, from which information on, among other things, life satisfaction and income can be derived by resorting to statistical surveys.

With the help of property valuation, the current market value of a property can be determined or estimated using various methods.

Purchasing power refers to the per capita income (net income excluding taxes and social security contributions, incl. transfer payments received) available in a year to the population of a region.

The purchase price is the price paid by the buyer of a property to the seller. The purchase price is listed in the purchase contract.

The purchase price factor is an indicator of how many years the buyer of a property can expect to earn rental income equal to the purchase price. The factor, also called the "multiplier", is particularly interesting for investors who want to know how quickly their investment is likely to pay off. The factor is calculated by dividing the purchase price by the annual net cold rent.

The purchase price level indicates the average value of the purchase price ranges in a given city in relation to the average of all cities. If the purchase price level is >100, the purchase prices for an apartment building in that location, for example, are above average.

An urban area is generally divided into four location categories: very good location, good location, medium location and simple location. Within the individual location categories, additional micro-locations can be identified, which also say something about the residential quality in this area and thus also something about the price level.

The market-active vacancy rate describes the share of vacant multi-storey dwellings in the total stock of the respective municipality.

The Letter of Intent (LOI for short) is a non-binding declaration of intent concluded between the negotiating parties before a contract is concluded. It certifies the interest in negotiations and a possible conclusion of a contract between buyer and seller.

A multi-family house (MFH for short) is a property that consists of at least three residential units. In contrast to a single-family house, several tenants or flat owners live in a multi-family house. In addition, an MFH can have commercial space. In that case, the term residential and commercial building is used in the real estate industry.

The abbreviation MS stands for Mobilité Spatiale and is used exclusively in Switzerland. There are 106 MS regions there, which are characterised by a certain spatial homogeneity and are subject to the principle of small labour market areas with a functional orientation towards centres. Individual MS regions are cross-cantonal.

The net rent describes the pure rent without operating costs that the tenant of a property has to pay to the landlord.

New buildings are properties whose completion dates back a maximum of three years. Properties whose completion dates back more than three years are referred to as existing buildings.

A fundamental distinction must be made between residential and non-residential buildings. In a residential building, at least half of the floor space must be used for residential purposes. If less than 50 percent of the total usable floor space is used for residential purposes, it is a non-residential building.

Commuters are all those employees subject to social security contributions whose place of work is different from their place of residence. A distinction can be made between commuters in and commuters out.

The commuter balance results from the difference between commuters in and commuters out.

The price range shows the range between minimum and maximum, e.g. in relation to prices per square metre within a residential area.

The yield level indicates the average value of the factor ranges of the average and good location in relation to the average of all cities. If the yield level is >100, above-average yields are achievable in this location.

A terraced house (RH for short) is an apartment building consisting of at least three identical single-family houses built side by side (mid-terraced houses and end-terraced houses). In statistics, terraced houses are usually counted together with single-family houses and two-family houses (EFH/ZFH).

Return means the profit on an originally invested capital that has been earned in one year. The return on this investment is always expressed as a percentage.

The city categories were defined by bulwiengesa AG, an independent analysis company in the real estate industry. They are divided into four classes according to their functional importance for the real estate market:
A-cities are the most important German centres with national and in some cases international significance. There are large, functional markets in all segments.
B-cities are major cities with national and regional significance.
C-cities are important German cities with regional and limited national significance. They have a relevant impact on the surrounding region.
D-cities are smaller, regionally focused locations with a central function for their immediate surroundings; lower market volume and lower turnover (Source: bulwiengesa)

In economic terms, a transaction is the transfer of an economic object from one economic entity to another, in short a sale.

The number of transactions represents the total of all sales made within a specified period of time.

The transaction volume is the amount (in euros) paid in all property investments within a specified period.

The sales price is the negotiated price at which a property is sold. The sale of real estate is exempt from VAT if, for example, the property is intended for owner-occupation or if the property is sold privately. However, if the property is to be rented out, the sale is subject to VAT.

Net migration is the difference between outward and inward migration, e.g. in a city or country.

Residential and commercial buildings are properties with at least four residential units. In addition to the pure apartment building, the term also includes mixed properties that contain commercial space, such as shop space on the ground floor or medical practices. However, the residential character dominates in the property. Synonyms in the real estate industry are multi-storey building, investment property or apartment building.

The home ownership rate is the ratio of owner-occupied dwellings to the total housing stock.

The living space includes all floor areas of the rooms within a dwelling. This includes living rooms, bedrooms, kitchens and adjoining rooms.

An urban area is generally divided into four location categories: very good location, good location, medium location and simple location. Within the individual location categories, additional micro-locations can be identified, which also say something about the quality of living in this area and thus also something about the price level.

A dwelling consists of one or more rooms that are enclosed to the outside and are used for living or sleeping. Furthermore, a dwelling must have certain characteristics that ensure the running of a household.

The so-called housing stock is the total number of dwellings in a given area. In order to calculate the housing stock of a reporting year, the number of additions and removals (completions, removals) is set in relation to the previous year's value. This is always done by 31.12. of the respective year.

If a main residence is officially registered, this counts as a move-in.

A two-family house (ZFH for short) is a property that consists of two approximately equivalent dwellings and serves two parties. If one of the two flats is of a much smaller size and cannot be reached through a separate entrance to the house, it is referred to as a single-family house with granny annexe instead of a two-family house. For statistical purposes, ZFH are usually counted together with single-family houses.