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Real estate prices continue to rise in and around Munich

The state capital of Bavaria is considered the most expensive metropolis in Germany. This is likely to stay that way for some time to come, considering the property prices in the greater Munich area, which have been rising for years. The market research institute of the Real Estate Association Germany has now presented the latest developments on the local market.

Although the price level in Munich has risen again since autumn 2020, the Munich bacon belt in particular is enjoying great popularity, not least due to the pandemic.

Significant price increases observed on the purchase market

The report on the residential real estate market in the Munich area recently presented in a video press conference by the market research institute of the Real Estate Association of Germany shows that significant price increases can still be seen on the purchase market. Prof. Stephan Kippes, head of the IVD market research institute explains: “Even in times of the Corona crisis, the demand on the residential property market in the Munich area is immense, and the high price increases are mostly not in sight. In the period from autumn 2020 to spring 2021, the purchase prices rose in part significantly, especially in Dachau, Erding, Ebersberg and Fürstenfeldbruck. “

The price gap between district towns remains large

With the exception of Starnberg, which is already the most expensive district town, the price level for condominiums rose significantly compared to autumn 2020. However, the price differential remains large. For comparison: In spring 2021, buyers in Freising had to pay an average of 4,680 euros per square meter, in Starnberg 6,410 euros. With a price increase of 5.5 percent, the increase was highest in Ebersberg, Fürstenfeldbruck and Erding followed with a price increase of 3.9 percent each. In Munich, the price per square meter also increased by almost two percent to 8,150 euros. According to the broker Andreas Hammerl, quoted by the Süddeutsche Zeitung, there is a simple reason that prices in Starnberg are barely rising: “The limit of purchasing power in this region has been reached”. Even in this exclusive area, the wealth of the residents has its limits.

According to the IVD, a similar picture emerges for free-standing single-family houses. In Dachau in particular, the surveys show a significant price increase of 6.3 percent. An average of 1.09 million euros was therefore estimated for a house there.

Demand clearly exceeds supply

The residential property market in the area surrounding the Bavarian capital is evidently unimpressed by the crisis. According to the IVD, the reason for this is the demand that is still far exceeding the supply. Purchase prices are still rising faster than rental prices. In the five-year window from 2016 to 2021, rents climbed 22 percent, while purchase prices for condominiums rose by a whopping 53 percent on average in the district towns.

According to the IVD, the pandemic has led to increasing interest in rental and purchase properties in the Munich area. The longing for nature and more space in combination with the flexibility due to the increasing number of home offices have led to the fact that communities with a good infrastructure have recently become very popular.

The creation of affordable housing represents an enormous challenge for the municipalities, explains the IVD in addition. For those with a low or middle income, the offer is becoming increasingly thinner.

Image sources: Anton_Ivanov / Shutterstock.com

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