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The real estate market in Munich - analysed by your real estate professionals from Graf Immobilien

It is important for both sellers and prospective buyers of real estate in Munich to know the current real estate market in the city. Only then can you find and sell the right property at a reasonable price. The determination of a value in line with the market is the be-all and end-all for a property and can decide on the success of the sale. Therefore, as a seller you should definitely carry out a well-founded property valuation in order to attract potential buyers.

Graf Immobilien offers you an insight into the current property market and property prices in Munich and supports you as a competent real estate professional in selling your property.

Being one of the most renowned real estate agents in Munich Graf Immobilien offers you optimal conditions for the sale or rental of your property, if desired with the help of various premium services. If you are interested in a free valuation, an appointment with one of our experts can of course be arranged at any time. 

 

 

Exclusively for you as an owner at Graf Immobilien:

Munich real estate market - the attractive city attracts investors

Munich offers one of the most important and most lucrative real estate markets in Europe, alongside the world's metropolises London, Paris and Berlin.

The fact that Munich is at the top of the ranking of the most expensive cities in Germany also applies to real estate prices. The city's favourable geographical location and well-developed infrastructure make Munich a popular place to work and live. In addition, Munich is an important national and international business, cultural, educational/research and trade fair location, which guarantees its inhabitants a high quality of life.

Due to these factors, the tourism metropolis of Munich is currently considered one of the most attractive investment markets in Europa. Due to the high existing purchasing power, the positive demographic development of the city and the strong economic situation with a low vacancy rate, Munich is considered a guarantor for permanently stable property prices.

Munich's surrounding area also contributes to the attractiveness of the city with many leisure and recreational opportunities, which are made possible by the well-developed (local) transport network are easily accessible. The good rail connections, the location at important motorways and an internationally recognized airport make Munich one of the most important European traffic junctions.

Property prices in Munich – high, higher, the highest

Due to the low vacancy rate and the strong urban influx without a corresponding new building, Munich is very attractive for both private and institutional investors. Real estate prices are developing in line with the growing popularity of Munich. 

The most popular districts of Munich with the best residential locations already demand five-digit square meter prices for residential properties, but also offer the corresponding quality of living.

These districts include the following (average prices per square metre for condominiums):

  • Old town (12.767,07 €/m2)

  • Lehel (12.132,81 €/m2)

  • Ludwigsvorstadt/Isarvorstadt (11.227,63 €/m2)

  • Maxvorstadt (10.707,80 €/m2)

  • Nymphenburg (10.091,74 €/m2)

It is still “cheapest” in Moosach or Obergiesing, where prices between 7000 and 8000 euros per square metre are called for.

Rental prices in Munich

With Munich's population (currently just under 1.54 million inhabitants), average rents are also increasing year by year. Meanwhile, the average cold rent in Munich is between 6,80 €/m2 und 18,10 €/m2 according to IVD (Immobilienverband Deutschland).

Depending on the district, year of construction and equipment, however, the rents are by all means higher and peak values of well over 20 €/m2 are achieved - in individual cases the rents are up to 36 € per square metre.

This pressure on rents in Munich also has a corresponding effect on the surrounding area. Since many Munich residents can no longer afford or are no longer willing to pay rents in the city, they are pushing into the surrounding communities. As a result, property prices and rents are also rising sharply here. According to the IVD, the rent level in the surrounding area of Munich will, in the long term, be brought into line with a 90 percent level in the capital. In Starnberg, average rents have already caught up with the Munich residents: here, average net cold rents of just under 17 €/m2 are due.

The rise in rents is fueled on the one hand by the low vacancy rate and the shortage of apartments, but on the other hand also by dynamic immigration and emigration. While many Munich residents can no longer afford the rents and are therefore leaving the city, many new, often well-trained specialists are moving into the city in search of jobs. They can then also pay the rents that are raised again when new tenants are found.

Purchase prices in Munich

Just like rents in Munich, the purchase prices for condominiums, houses and land are above the German average. for the fifth year in a row, the real estate market exceeded the money turnover with real estate by 5%. At least that is what the expert committee of the capital reports. And the prices of real estate continue to show a strong upward trend in other respects as well - always driven by a high demand that meets only a limited supply.

Turnover in 2018 was around 12.7 billion euros. The largest share of this was generated by the sale of developed land, followed by condominiums and plots of land. The distribution between monetary turnover and contracts concluded is interesting. For while developed plots of land only account for just under 10% of the concluded sales contracts, they generate 41% money turnover. Residential and part-ownership, on the other hand, account for 84 % of all contracts, but only account for just under 38 % of total turnover.

All in all, however, it can be said that the prices for real estate in Munich currently only know the way up. There is still no sign of the feared bursting of an alleged real estate bubble. And with a continuing influx and good economic situation, there are no indicators that this will change any time soon.

Property prices in Munich - price explosion due to lack

Since 2010 at the latest, a steep rise in the price of land for residential development has been observed, which has not slowed down over the past 8 years. Also in 2018, the prices for residential land have again risen by around 11 %.

The average purchase price for an undeveloped plot of land for single and multi-family houses was around 1.3 million. The square metre prices range between 2.000 €/m2 and 4.350 €/m2. Depending on the condition and location, however, prices can also be as high as 11.000 €/m2. The highest paid price for a plot of land for the development of a single-family house was around €7.0 million in 2018.

The large price ranges for land prices in Munich are mainly dependent on the location. Since there is also the prospect of fewer and fewer plots of land being available, prices will continue to rise.

House prices in Munich – this is how much a house in the state capital costs

Exclusively for you as an owner at Graf Immobilien:

 

Your advantages with Graf Immobilien

  • extensive market knowledge: We know the city, the people and the real estate market.
  • competent & experienced: Our employees are all qualified and are constantly training
  • realistic real estate valuation: We determine the market-driven sales price for you!
  • personal support: A personal contact person is available for you around the clock
  • honest & transparent: For us, a partnership based on trust is the prerequisite for success.  

Anyone wanting to buy a house in Munich will quickly find themselves in the seven-figure range. Just like the prices for undeveloped land, the prices for residential houses in Munich have also continued to climb. Whereby especially in the new construction sector the rising land prices are likely to be an important price driver - as is clearly shown by the price differences between new and existing properties.

In 2018, the average purchase price range for resales, i.e. the sale of existing properties in Munich, was between €800,00 and €2,000,00 .

For new buildings, the scale starts at €1.2 million and goes up to €4 million. In one exceptional case, the purchase for a single family-home in a prime location was €12 million. Semi-detached houses are somewhat cheaper: Here you can get the new building for an average of €1,200,000 and the existing house in Munich for €990,000. In the case of terraced houses, the newly built terraced corner house leads with an average purchase price of €1 million, followed by the middle terraced house for around €920,000. The existing properties cost around €900,000 and €795,000 respectively.

Cheap condominium in Munich? No longer exists.

A continuous increase has been observed since 2010 for both average and good residential locations. In 2018 the increase was 9.5%, and since 2010 the prices for condominiums have even almost doubled.

Theaverage price for a newly built condominium in an average location in 2018 was €7,800 €/m2 according to the expert committee, and €8,400 €/m2 in good locations. The top price achieved in 2018 for a new apartment in Munich was even €32,000 €/m2 

Existing apartments are slightly cheaper, but have also experienced a price increase of 10% in 2018. Thus, the average purchase price in an average location is around €6.100 per m2 and in good locations €7,500 €/m2. In the end, how much the apartment costs, depends very much on the equipment, the location and the size .

Purchase prices in the surrounding area of Munich

The housing pressure in Munich is now also noticeable in the surrounding area. More and more areas are being designated as building land and residential projects are being realized. Due to the great demand for living space, also in the surrounding area, prices are also rising steadily.

Although the prices in the surrounding area are on average still significantly lower than in the metropolis itself, prices are nevertheless rising rapidly here. Especially in areas with a very high quality of life, real estate prices can already keep up with Munich's conditions, or even exceed them. This is the case inGrünwald or Gräfelfing, for example with prices up to 1,6 million euros.

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Development forecast for the property market in Munich

The Bavarian capital will continue to grow in the future. In order to cope with the dwindling settlement areas within the urban area, the housing policy action programme "Wohnen in München VI" aims to create building rights for 4,500 residential units and 2,000 apartments per year in subsidised and price-controlled housing construction. Until 2021, the funding framework amounts to 870 million euros.

Further housing projects are to provide 8,500 new flats each in the next few years. On the site of the former Bayernkasse, for example, there are plans to create a new urban quarter with schools and leisure facilities, which will provide housing for up to 15,000 people.

In the past year 2018, new record levels of housing creation were recorded. Over 12,500 building permits were issued and almost 8,100 apartments were completed. Munich's housing policy focuses primarily on the creation of affordable housing. To this end, subsidies have been applied for for over 2,000 apartments.

As a metropolis that is home to innovative companies with pioneering roles in the environmental and technology sectors, ecologically sustainable real estate with low energy consumption is very much in vogue in Munich.

According to surveys and statistics, the "Munich" trend continues to rise. This means that real estate prices and values will continue to rise by up to 20%.

Conclusion on the property market in Munich

Munich is still a popular investment opportunity with great potential. Even if opinions are divided and some experts do not consider the bursting of a real estate bubble unlikely.

If you do not want to take unnecessary risks and want to profit from the price rally of the past years, then now is a good time to sell your property. We will be happy to support you in this and get the best out of it for you. Graf Immobilien has over 30 years of experience in the Munich real estate market – we know how to sell your property successfully.