We would like to start by saying that our information is based on experience relating to the market segment handled by Engel & Völkers. Engel & Völkers specialises in the procurement and supply of upmarket residential properties in Munich. Munich, also known as the “northernmost city in Italy” is maintaining its position as a very popular residential and business location in Germany during an upward trend in economic activity. A healthy mix of industries with the focus on “cutting-edge technology“ and “media management”, a model infrastructure and many tourist attractions justify the strong attraction for the Bavarian capital. Its “assets” also include the beautiful surrounding areas, such as the Bavarian lakes, and its proximity to the Alps and Italy.
There was already a clear upturn in the real estate market in Munich. During the course of the year the property market showed itself to be extremely stable in terms of sales. The strong trend being observed towards urban living contributed to this to a marked degree. The already well-known top locations also enjoyed great popularity in 2006. The prices achieved have been heading the top market segment for many years. Many of the customers, who are for the most part relatively young, financially strong families, come originally from other countries in Europe, or are returning to Germany from these other countries in Europe.
The demand for attractive residential properties continues to outstrip the supply. This results in the fact that prices notably for quality villas and town houses are stable. Hence the purchase of a residential property in one of the following very desirable locations constitutes a safe investment. Nevertheless, generally well-informed interested parties repeatedly also encounter prices from sellers, which are not currently justified. This leads in many cases to the fact that marketing time-frames, unlike previous periods, are extended by 3-6 months. The average marketing time-frame is 3 months.
THE MOST DESIRABLE LOCATIONS
The districts of Alt-Bogenhausen, Bogenhausen–Herzogpark, Lehel and Alt–Schwabing have always been some of the most desirable locations in the city of Munich area. In great demand are notably Jugendstil villas, detached houses suitable for families and town houses. The residential property market in terms of generously-proportioned, old owner-occupied flats restored to a high quality, with at least four to six rooms, also remains stable and high-priced. On the other hand, unrestored properties with less attractive facade architecture are in competition with new building activity in these areas.
Many customers searching for detached houses want properties with a living area of at least 180 m² and land of between 800 and 1,000 m². Apart from the right location (sunny aspect or not, quiet area, representative neighbourhood development) and the design and layout, the infrastructure plays an important role when deciding on a property. The better the location, the more likely buyers will be prepared to accept compromises in terms of design and layout.
Customers wanting owner-occupied flats place particularly large value on a generously-proportioned ground plan with a minimum living area of 120 square metres, and high-quality design and layout. In the case of particularly desirable old flats, typical style elements such as parquet floor, panelled doors and stucco are a must. Flats with the largest possible balconies and / or terraces are very desirable. In the case of flats above ground level, the complex should have a lift. In a city centre location parking opportunities are very rare, so that if they are available their impact is to greatly increase the value of properties in this location.