Stable prices for holiday properties on the Upper Bavarian lakes – Inflation hardly impacting the market at all

The lakes of Upper Bavaria rank among the most popular regions for premium holiday houses and apartments in the whole of Germany. Demand here has exceeded the availability of real estate for many years. The prices for holiday properties are consistently high on Lake Tegernsee, Lake Chiemsee, and in the so-called “Fünfseenland” region, which includes Lake Starnberg, Lake Ammersee, Lake Wörth, Lake Pilsen and Lake Weßlinger See. This is according to the “Market Report on Holiday Properties in Germany 2023” (in German), which is published by Engel & Völkers for the tenth time this year.

Highest prices found on Lake Starnberg and Lake Tegernsee

Prices for detached and semi-detached houses in very good locations on Lake Starnberg range from 3 to 15 million euros. “Truly outstanding properties in top locations here have been known to sell for as much as 30 million euros,” reveals Till-Fabian Zalewski, CEO of Engel & Völkers in Germany, Austria and Switzerland. He continues: “Houses in good locations but not directly located on the lakefront sell in the Starnberg region for between 1.2 and 7 million euros. Holiday properties in simple and average locations range from 800,000 to 3 million euros.”

There is also high demand for premium holiday properties among prospective buyers based in Munich – a city with high purchasing power – as well as all across Germany. Exceptional properties on Lake Tegernsee are commanding top prices of up to 30,000 euros per square metre. The average price bracket for holiday apartments in very good locations on Lake Tegernsee is 15,000 to 22,000 euros per square metre. Prices in good locations range from 10,000 to 15,000 euros per square metre.

Prices remain stable – Condition of properties increasingly important

With availability unwavering, the high level of demand for holiday properties is declining slightly in simple and average locations due to the recent development in interest rates. Some of those interested in buying are unsure about the timing of their investment, but not about the fundamental decision to invest. “This is having next to no impact on prices however. Valuations for houses and apartments around the Bavarian lakes – already at a high level thanks to the exclusivity of the region – are proving stable in spite of the latest development in interest rates. In fact they have even continued rising slightly in the top segment,” Till-Fabian Zalewski reveals. Most buyers of premium holiday properties have a large amount of private equity, meaning their purchase decisions are hardly impacted by matters like interest rates and inflation. In the luxury segment, properties in prime lakeside locations are usually acquired as second homes and intended first and foremost for owner occupation. Holiday rentals are less common here.

Another factor becoming increasingly relevant when purchasing holiday homes is the condition of the property. High renovation costs, long delivery times for materials and the scarcity of skilled craftspeople are currently making the prospect of buying a holiday property in need of refurbishment less attractive. Consequently, prospective buyers are paying much closer attention to the condition of potential holiday properties than in previous years. Unique residences in prime locations are still an exception here. They remain in high demand, even if they require renovation work.

Outlook: Constant level of high demand will sustain investment

Holiday properties as an asset class are an ideal option for investors looking for security, and they make for a popular method of old-age provision offering particular stability in the long term. “The consistently strong buyer interest means that properties in good and very good locations on the Bavarian lakes bring a particularly low risk with them,” says Till-Fabian Zalewski. “This secures the status of holiday houses and apartments in this region as a stable asset class when it comes to long-term asset protection. Our real estate agents therefore anticipate that demand in the region will remain stable or increase slightly over the coming years.”

Hamburg - Classic country house with panoramic views on Lake Tegernsee - (c) Engel & Völkers Am Tegernsee_Sonja Sindlhauser

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