Market Report Munich

Current figures, analyses and forecasts

Market Report Munich

Current figures, analyses and forecasts

Property prices Munich

If you look at the Germany-wide development of property prices over the past few years, the name Munich keeps coming up alongside Hamburg, Berlin or Frankfurt am Main. Due to constantly rising asking prices, the state capital of Bavaria is considered the metropolis with the highest price level in the Federal Republic. 

Apart from this, there is still a high demand for living space in Munich, as the city is an extremely attractive place to live due to its cultural, economic and political importance. The cosmopolitan city attracts a correspondingly large national and international clientele of capital investors, young families, and students.

In our Munich Property Market Report, you can find out everything you need to know about current asking prices for condominiums and houses, rental rates and how prices vary in the individual districts.

1. Current rental prices in Munich

The high demand for living space and the associated rise in property prices already give some indication of this: Munich is growing. Currently almost 1.6 million people live in the city on the Isar. This corresponds to a population growth of +4.7 percent since 2014. In addition to the families and students mentioned at the beginning, it is especially skilled workers who work for resident international companies such as BMW, Allianz or Siemens who are migrating here.

The enormous population growth is reflected in an extremely low vacancy rate. Just 0.2 percent of available residential property is unused. This figure is far below the level of equally desirable residential locations such as Frankfurt am Main (0.3 percent), Stuttgart (0.5 percent) or Cologne (0.9 percent).

2. Current rental prices in Munich

Of all major German cities, Munich has the highest average asking rent. This applies to both existing properties and new buildings.

In the second quarter of 2020, tenants paid an average of 18.33 euros per square metre of living space for an existing property, which is +2.1 percent more than in 2019. If the price changes are calculated over the past five years, the growth in this sub-market even amounts to +18.64 percent

Rents in the new construction sector are also continuing to rise. After the price level here eased slightly in 2016, the bottom line is that supply rents have risen again in the past four years. In the second quarter of 2020, tenants paid an average square metre price of 20.62 euros for newly created residential space.

Apartments in Munich

3. Property prices for condominiums

Not only the rents, but also the asking prices for condominiums are at record levels throughout Germany. Compared to 2019, the purchase prices for both existing and newly built condominiums have increased.

If we look at the development of asking prices of existing and new buildings separately, we can see that the latter type of property has experienced a greater increase in value over the past year. For example, a square metre in a new Munich building cost an average of 10,431 euros in the second quarter of 2020. This corresponds to a growth of +10.5 percent compared to the previous year.

In contrast, buyers paid an average price of 8,524 euros per square metre for an existing condominium. The offer price thus rose by +7.84 percent. Calculated over the past five years, the increase in value for condominiums in Munich was +38.09 percent (new buildings) and +33.96 percent (existing properties).

4. Property prices for single-family homes

The upward trend on the housing market in Munich has also been unbroken for years. Average asking prices of 1.512.456 euros were achieved for single-family homes in 2020. This represents a +26 percent increase in the price level compared to 2015.

Property prices for apartment buildings

The market for apartment buildings and residential and commercial properties in Munich has for years been characterised by an extreme excess of demand. The average asking price in the first half of 2019 was 7,468 euros per square metre. This means Munich has a much higher price level than all other major cities in Germany. Transaction figures, rents, prices and factors can be found in detail in our Residential and Commercial Property Market Report 2020 (German only).

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5. Munich property prices by district

Even though Munich property prices are at a consistently high level, there are sometimes significant price differences depending on location and type of property. The most sought-after districts for buyers of condominiums are the old town, Altschwabing and Altbogenhausen. However, Nymphenburg, Schwabing and Obermenzing are considered the preferred residential areas of house buyers. In the following we will take a closer look at the price ranges in the districts of Munich in very good, good, mid-range and secondary locations.

Very good Location

Munich districts in a very good location include the centrally located old town, Lehel and parts of Schwabingen, Nymphenburg and Neuhausen. Furthermore, southern parts of Solln, Thalkirchen and Harlaching fall into this location category. Single- and two-family homes in these districts range in price from 5 million to 20 million euros. The square metre prices for condominiums in these districts are also far above the average property prices in Munich and range between 10,000 euros and 25,000 euros. In the residential and commercial buildings segment, prices are now between 6,500 and 13,000 euros in prime locations.

Good Location

The same applies to properties in good locations, which have the largest share of the Munich property market. In the districts of this location category, single- and two-family homes reach asking prices of 1.8 million to 7 million euros. Condominiums are also at a high price level and achieve square metre prices between 8,300 euros and 17,000 euros. Apartment buildings cost 6,000 to 8,000 euros per square metre. Districts in good locations include the central areas of Maxvorstadt, Au, Isarvorstadt and Haidhausen. This also includes the districts of Obermenzing, Laim, Hadern, Westpark, Pasing Obergiesing, Untergiesing and parts of Solln and Thalkirchen.

Mid-range Location

The eastern districts of Berg am Laim, Riem, Trudering and Ramersdorf in particular are considered mid-range locations. Moosach, Untermenzing and Allach also fall into this category. The prices offered here for single- and two-family homes range between 850,000 euros and 3.5 million euros. Property prices for condominiums in these districts of Munich range from 6,500 euros to 9,500 euros and purchase prices for entire apartment buildings are between 4,750 and 6,250 euros per square metre.

Secondary Location

Comparatively few districts in Munich are in secondary locations. These include Lochhausen, Langwied, Aubing, Feldmoching and parts of Am Hart and Hasenbergl. With property prices ranging from 700,000 euros to 1.7 million euros for single- and two-family homes, these districts have the lowest price level in Munich. The same applies to square metre prices for local condominiums, which range between 5,000 euros and 8,000 euros. Prices for residential and commercial buildings in Munich start around 4,250 euros. In Munich’s few secondary locations, prices range up to 5,250 Euro.

6. Forecast for the development of Munich property prices

For investors and residents alike, the question of whether Munich property prices will continue to rise is important. According to current estimates by Engel & Völkers, the upward trend in the property market, which has lasted for years, will continue. 

Florian Freytag-Gross of Engel & Völkers Munich forecasts: "Despite the weakening economy due to the corona pandemic, the constantly high demand situation continues to lead to an increase in Munich's property prices. The upturn is particularly noticeable in core locations. The greatest potential, however, continues to lie in simple locations, due to increased demand for more rural areas as well as the redensification".

Property Prices

You can gain even more in-depth insights into the residential property market in the 64 most important cities in Germany during a personal meeting. We look forward to hearing from you!

The exciting market for residential and commercial buildings is classified as follows by Christoph Nelles, Engel & Völkers Commercial Munich: "For more than ten years, Munich's market has recorded an extremely high demand overhang, which has been reinforced by the city's activities since August 2018. The predicted division of the market due to the tightening of purchasing conditions in the conservation areas and increasing competition in the areas without restrictions is proving to be true. A trend reversal is not foreseeable here in the medium term. Due to the interest rate policy of the ECB, Munich nevertheless remains an extremely stable market in terms of value".

Transactions, factors, prices, rents and further information on the market for Residential Investment can be found in our Market report for apartment buildings in Germany 2020 (German only).

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Engel & Völkers
Property prices in Germany

Sources by chapter:

Current developments on the Munich property market City of Munich, CBRE-empricia vacancy index, Engel & Völkers Residential, Engel & Völkers Commercial

Current rental prices in Munich: empirica-systeme, Engel & Völkers Residential

Property prices for condominiums: empirica-systeme, Engel & Völkers Residential

Property prices for single-family homes: empirica-systeme, Engel & Völkers Residential

Property prices for apartment buildings: empirica-systeme, Engel & Völkers Commercial