The series “Selling Sunset” provides exclusive insights into the world of luxury real estate in the USA – and has been viewed millions of times. But how does the business work in Germany?
It will be one of the most expensive apartments in Germany: almost 476 square meters of living space, panoramic views of Wiesbaden city. The ceilings of the penthouse are over five meters high. The cost: just under twelve million euros. For comparison: the most expensive apartment last year cost 15 million euros, followed in second place with under eleven million euros.
“Villas up to about five, six million”
Mira van der Zalm is the woman who is currently looking for a buyer for this apartment. She has specialized in brokering apartments and houses in Wiesbaden in the upper price segment. That means: “Villas up to around five or six million and penthouses in the range of two or three million,” she says about her business. In the three-part ARDIn the documentary series “Auftrag Luxus” she provides insights into her business.
This has interested millions of viewers since the successful American series “Selling Sunset”. In the US production, top-styled real estate agents take viewers into the world of the super-rich and beautiful in Los Angeles. The doors of the otherwise closed luxury villas open for the average consumer.
Fascination of luxury living
And the viewers can hardly stop marveling: In the villas there are stoves costing $10,000, basketball courts in the basement and of course: two kitchens. A “show” and a “working” kitchen. In the working kitchen, viewers learn, the real cooking takes place, while the show kitchen is more of a decoration. Here, at most, toast is prepared. It is apparently precisely this look behind the scenes that fascinates millions of viewers.
Things are a little less glamorous in Wiesbaden. Flashy luxury cars and conspicuous displays of wealth like in LA are not the order of the day in this tranquil spa town. But first glances are deceptive: wealthy people have appreciated the upscale atmosphere of the Hessian state capital for decades. 137 millionaires live here. This makes Wiesbaden number two in the state of Hesse after Frankfurt am Main. It is a rather hidden but well-heeled market that van der Zalm has chosen.
Apartments from 150,000 euros
However, the prices are worlds apart between LA and Wiesbaden. The cheapest apartment that van der Zalm publicly listed in August was 39 square meters for 150,000 euros. One of the most expensive is a penthouse apartment in the heart of Wiesbaden for almost twelve million euros. This is likely to make it into the top ten most expensive apartments in Germany. But while this is the exception in Germany, in LA such prices are the norm in the luxury segment.
Van der Zalm also has some properties with a second kitchen for show effect. This way you can treat yourself to a little Hollywood glamour in the Hessian state capital. But who has that much money to spend on housing anyway? “Lawyers, doctors, celebrities,” says the estate agent.
Customer acquisition at the classic car rally
How does she get to know them? For example, at a classic car rally, where she has been driving her father’s classic car for several years – and at the same time she can make new contacts for business. She also has an office in downtown Wiesbaden. “For walk-in customers,” she says. That also seems to be quite common in the luxury segment.
One advantage for the wealthy clientele, which she emphasizes on her own website: Prices in Wiesbaden could continue to rise in the future. Building land for new construction is limited in the city, so her company promotes the properties on offer as investments.
Good times for brokers – bad times for Average earners
Others are also noticing that apartments are no longer just for living, but have been used more and more as investment properties for years: tenants and buyers with more modest budgets. They have had to dig deeper into their pockets in recent years. For example, according to the Federal Statistical Office, house prices in Germany almost doubled between 2010 and 2022.
Recently, higher interest rates have led to something like a cooling off of the real estate market for the first time in a long time. After exploding in recent years, prices have recently fallen again somewhat.
Luxury sector less from Decline in demand affected
However, the luxury sector seems to have been spared from this. tagesschau.deIn response to the inquiry, the German Real Estate Association (IVD) says: “The demand for so-called luxury properties has not suffered to the same extent from the rise in interest rates, since a lot of equity is often used in this area and a comparatively smaller proportion of the purchase price has to be financed at all.”
However, real estate agent van der Zalm has observed a few trends: “We used to have a lot of Russian clients, but that has of course disappeared since the Ukraine war. And also a lot of Arab clients.” That has also almost completely disappeared since the pandemic.
Commissions are freely negotiable
However, the broker and her team are unlikely to be starving. She does not want to reveal exactly how much commission she earns. Commissions are freely negotiable in Germany. The IVD also did not want to comment on this when asked.
What there are are standard values: According to the LBS, the average commission was recently 7.14 percent (including VAT) – usually split between buyer and seller. In other words: On average it is 3.57 percent for both sides. If you apply this average value to a one million euro property, you end up with 357,000 euros in commission for the broker. However, it must be taken into account that it can take several weeks before a buyer is found.
What is luxury?
Primary and secondary kitchens, as much space as you want: especially in times when even normal-priced apartments are in short supply, this is an unimaginable luxury for most people.
But what does luxury mean to van der Zalm? The high-priced real estate agent is modest: “For me, luxury is not tied to material things. That may be the case for some others. But for me, luxury means time, spending time with my family and being able to pursue my hobby.”
The three-part series “Auftrag Luxus” can be found in the ARD media library.