Traditional and modern, cosmopolitan yet homely – Munich combines many contradictions and is known worldwide for its annual Oktoberfest. The Bavarian capital is not only a tourist magnet – more and more people want to settle permanently on the Isar. The great demand for real estate is currently showing its consequences: The prices for property have reached an all-time high.
In the premium segment, demand clearly outstrips supply which is why prices of up to 12 million euros can be achieved for semi-detached and detached houses in prime locations. In fact, Engel & Völkers noted price increases in the first half of 2013 in almost all other segments and location categories. This is the result of the first published Engel & Völkers “Property Market Report Germany 2013/2014”.
In the centre of Munich, individually owned flats with 3 to 5 rooms in the old part of town are very high on the buyers’ wish list. “Individually owned flats, especially in the well regarded areas of Alt-Bogenhausen, Alt-Schwabing or Lehel, are highly sought-after. Good areas such as Max- and Isarvorstadt are also popular”, according to Florian Gross, Managing Partner of Engel & Völkers Munich and the Munich South region. The greener parts of town – Waldtrudering and Waldperlach in the South-East – as well as the Munich suburbs of Vaterstetten and Ottobrunn are especially popular with families. “Generous, family-orientated living spaces are the most important criteria here”, observes Felix Grummt, Managing Partner of Engel & Völkers in Munich South-East.
Likewise, property in the West of Munich – such as in the prime locations of Nymphenburg and Neuhausen – is highly sought-after by buyers. Here, prospective buyers look above all for semi-detached and detached houses in Nymphenburg and Gern, or in the locations situated closer to the centre in Neuhausen” says Robin Graf Douglas, Managing Partner of Engel & Völkers in Munich West. The North-East part of town, Freimann, is also increasingly asked-after. “This part of town has developed very well over the past few years through numerous infrastructure measures. In comparison to the expensive areas in the centre, the property prices here are relatively moderate”, says Željko Jelić, Managing Partner of Engel & Völkers in Munich North-East.
Slight price increase expected in 2014
During 2012 over 1800 less individually-owned properties were sold than in the previous year, and the transaction volumes fell to proportionally less. With it, the average sales volume rose by 8 percent to EUR 288,678. The price increase of semi-detached and detached houses showed even more clearly. The number of sales fell by 150, but the corresponding transaction volume increased by about EUR 75 million to EUR 923 million. The average sales volume reached a record value of EUR 825,581 and showed an increase of 23 percent compared to the previous year.
The current supply and new-build possibilities are extremely scarce, especially in desired locations, because the city is already densely populated. The progressive increase in population, as well as the continuing trend towards steadily valued real estate investment, require a continued high demand in all areas and segments – and are hence why Engel & Völkers assumes a slightly upward price development for 2014.
The “Property Market Report Germany 2013/2014” has been published by Engel & Völkers for the first time. This report offers an overall view about the current market and price development of semi-detached and detached houses, individually-owned flats and rentals in 50 locations. The extensive atlas is based on the market knowledge of the German Engel & Völkers Shops, as well as on data from the respective expert committees.