Residential City Profile

Munich

When your Home is also your Investment

Consider the location factors of the property. In order to guarantee a long-term value development of a property it is necessary to understand the already known data of the location. We provide you with this important data at the level of each district of the city and update it every month.

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In which way can this data influence your investment decision?

Get a more detailed overview of the city you are interested to invest. Rather than just looking at the city as a whole, go that bit deeper. Look at the different districts, look at the property prices and how they have been impacted by changes i.e gentrification that has taken place in the last years. This could be a good indication of the impact on the prices for the future.

A good indication of how realistic the property prices are, can be gauged on how long properties stay on the market before being sold. When properties are slow to sell , this could indicate room for negotiation! When properties are moving quickly, then you have to move quickly too!

Macroeconomic data can also provide some valuable information, particularly when you are looking at it from a ‘supply /demand’ perspective. Comparing the number of households in the district and the number of housing units available, is a good indicator how the property prices could develop. When the demand is higher than the number of properties available on the market, prices will rise.

The age of the inhabitants in a district will certainly have an effect on the property prices. Districts with a younger age group, those finishing their studies starting new jobs, starting families etc create a demand for cafes , restaurants, entertainment outlets, kindergartens, organic markets etc enabling new businesses for flourish. This in itself creates a further demand as more people want to be part of this and so, is then reflected in the property prices. Back to the supply/demand.

When a district has a healthy employment rate, therefore a stronger purchasing power, this will undoubtable have a more positive effect on the future potential for property.

The average net income in a district to some degree can be related with the employment status, but of course, a lower net income district with a high employment rate with young residents could also become a future area for development. Sometime we also have to take a longer term view.

By considering the number of people per household in a district, this will help determine which district best match with your requirements and investment strategy. Buying a 3 room apartment for a family could also work well for student sharing accommodation, if there is a high student presence in that district and the demand is there.

City Report Munich

Since 2014, we have had the pleasure of assisting JLL clients and advisors in finding the best possible financing for their investment projects in Germany.

MLP Munich

Continued extensive construction activities in Munich

Munich’s population grew by almost 50,000 (+3.3%) bet- ween 2014 and 2018 and even if growth is now slowing down somewhat overall, the City Council expects that the population could continue to rise from 1.54 million in 2018 to 1.85 million by 2040. Due to the booming economy and economic immigration, especially of young people bet- ween 18 and 30 years of age, and simultaneously rising birth rates, a population growth of up to 20% is expected. To meet the growing excess demand in the housing mar- ket, increased new construction activity has been observed for several years. 52,171 apartments were completed be- tween 2014 and 2018, and a high level of new construction activity is also expected in the future. A total of 12,581 building permits were issued in 2018, almost matching the record number issued the previous year. The City Council has also set itself the goal of building a further 120,000 apartments by 2030. However, the plans to increase the redensification proposals are controversial. Local citizens’ initiatives are calling for a citizens’ petition to take action against excessive redensification, to bring about the pres- ervation of green and open spaces and to suspend the planning of large new development zones. To alleviate the shortage of living space, two new development zones are at the planning stage on the last of the available large sites within the city limits. A new residential district with around 1,300 apartments is envisaged for Lerchenauer Feld, a 23-hectare site in the district of Feldmoching, for which the approval decision is expected in 2022. There is also a con- troversial planning zone in the northeast of Munich between Daglfing and Johanneskirchen, which has development potential for up to 30,000 apartments on 600 hectares of undeveloped farmland.

Prime rent rises again

In view of the strong excess demand, rental price growth continued in the second half of 2019, although the increase of 3.8% year-on-year was below the 5-year average growth rate (+5.1%) and below the previous year’s result (+4.5%). Apartments were on offer at an average rent of €20.00/sqm/ month. Despite the top price segment recording a rental price drop in the previous year (-2.2%), prices rose again (by +4.9%) last year, to reach a new high of €30.00/sqm/ month. Above-average price rises were also observed in the micro living segment (< 45 sqm residential area) and in the case of rents for new-build apartments, which in- creased to €26.00/sqm/month (+7.5%) and €21.15/sqm/ month (+4.8%) respectively. In contrast, the average asking rent in the lowest price segment declined slightly. With av- erage rental growth significantly above 20%, the greatest price rises were achieved in sought-after locations close to the city centre such as Ludwigsvorstadt, Maxvorstadt around the university quarter and in Sendling.

Greatest price rises in the top purchase prices

The price increase in Munich’s market for condominium apartments also continued, with asking prices rising much more strongly than rents on average. The average asking price for a condominium apartment in Munich in the sec- ond half of 2019 was €8,130 per sqm, which corresponds to an increase of 8.5% compared to the previous year and is slightly above the 5-year average growth rate (+7.9%). The biggest price jump was observed in the top price segment, whose growth of 14.6% was almost twice as high as the 5-year average growth rate and has now reached €12,000 per sqm. With growth of 12.5%, an above-average increase to €8,900 per sqm was also recorded in the new- build segment. The lowest growth, although still above the 5-year average growth rate, was achieved by the lowest purchase price segment which increased by 10.2% to €6,040 per sqm. The city centre districts of Maxvorstadt and Altstadt-Lehel benefited from the strongest average price rises in the past two years; however, significant increases were also observed in some peripheral locations such as Untergiesing.

Housing Market Munich

Following the significant increase in the volume of completions in new residential construction last year, a high result was again achieved in Munich in 2018 with around 8,100 new apartments, and further strong new-build activity is also to be expected in the coming years. With around 12,580 building permits granted in 2018, the record high five-digit volume of the previous year was once again reached (around 13,480 permits). Munich’s population is also continuing to grow, albeit less dynamically than in the other major cities (the population grew by 3.3% between 2014 and 2018).

Find the best Mortgage in Munich now

We have developed a mortgage calculator, that shows you the best terms and conditions to suit both, your financing requirements and personal situation in just a few minutes. Unlike most other mortgage providers for the German market, we request no personal data, enabling you to remain private and with anonymity. Please go ahead start the process of your property financing. 

Our service is free of charge for you. As it is common that mortgage brokers in Germany are getting paid by the banks.

Our Premises in Munich

Your German Mortgage Team in Munich

For more than 25 years we have been helping clients from all over the world to implement their real estate financing in Germany. We put our market knowledge at your disposal and guarantee a smooth process of your financing from the first contact to the disbursement of the loan.

Jan Süverkrübbe

Jan Süverkrübbe

Senior Financial Consultant

When you think of financing, think of Jan, who has made it his business to complete his customers’ financing reliably and always on time. Jan would love to speak with you about your property purchase in Munich.