With its diverse range of international businesses, Munich attracts experts and managers from inside Germany and abroad. The growing population plus increasing purchasing power means that residential properties are in high demand. Owing to the noticeable shortage of supply and the increasing prices in both good and prime locations, owner-occupiers, investors and tenants are increasingly turning to properties in basic and average locations.
The highest prices for apartments for sale and to rent can be found in the Altstadt, Altschwabing and Altbogenhausen. 4-bedroom apartments with a surface area of between 100 and 140 square metres are particularly sought after. In the West of Munich, semi-detached and terraced houses are currently in very high demand, the most sought-after areas being Nymphenburg, Neuhausen and Obermenzing. There is potential for the development of new housing in this area owing to new construction projects which plan to demolish existing structures or renovate conversion areas. These projects are responsible for the appearance of new apartments in Berg am Laim and Sendling. New residential developments in Grafing and Poing, in Munich’s affluent suburbs, present an alternative to the smaller offering in the crowded central districts.
The continuous price increase is reflected in the state capital’s transaction numbers. With a transaction volume of 4.045 billion euros, Munich achieved the highest sales turnover in the property sector compared to other German cities. The average acquisition cost stood at 365,900 euros, 12% higher than 2013. In the housing sector, the purchase volume rose by 200 million to 966 million euros, in 968 properties sold. Buyers paid on average approximately 997,900 euros for a house (approx. 20% more than last year).
The continuously high excess demand especially affects the bottom prices of detached and semi-detached houses and apartments. The entry-level prices for houses in prime locations rose to 2 million euros in the first half of 2015. First-class apartments in top locations fetch up to 18,000 euros/m2. Engel & Völkers observed a slight increase in prices in the rental sector.
Engel & Völkers predicts that prices will continue to increase in 2016 for the detached and semi-detached housing sector in all locations. With regards to apartments and rental, it can be predicted that prices in top locations will level off. In basic and average locations, however, growing demand is likely to result in an increase in prices. The city is attempting to handle the pressure of demand with development projects, such as that on the former Osram site in Untergiesing, which will provide 370 new apartments.