The purchase prices for real estate in Munich continue to melt - effects on the buyer's market and rising rents.

The purchase prices for real estate in Munich continue to melt - effects on the buyer's market and rising rents.

According to a report from www.abendzeitung-muenchen.de, there are currently significant changes in the Munich real estate market. Increased mortgage interest rates, stricter lending criteria and high inflation have caused property purchase prices to fall. This offers potential buyers favorable conditions with a wide range of offers and great room for negotiation.

In the third quarter of 2021, the total turnover of real estate sales in Bavaria was almost 20 billion euros, but in the second quarter of 2022 this value fell to around 10.6 billion euros. Most recently, a slight upward trend to 12.4 billion euros was noticeable in the third quarter of 2023. The marketing time for real estate has also increased, and it takes on average up to 14 weeks for a property in Munich to be sold.

At the same time, pressure on the rental market continues to increase as many potential buyers remain uncertain and prefer to rent, which increases rental prices in Munich. The basic rents for new contracts rose from 18.70 euros per square meter in spring 2023 to 19.50 euros in the third quarter of 2023. The trend shows that although the purchase prices for real estate are falling, rents in Munich are continuously rising.

The existing condominiums still cost an average of 8,500 euros per square meter in spring 2023, but at the end of 2023 they were “only” 8,075 euros. Rare properties such as single-family homes are also becoming cheaper, with the average price for a detached single-family home falling from 2.075 million euros in spring 2023 to 1.94 million euros at the end of 2023.

These developments show that the Munich real estate market is changing, which is affecting both potential buyers and tenants. The change in real estate prices affects behavior on the real estate market and may lead to further adjustments in the future. The current situation indicates a buyer's market and increasing demand for rental properties, suggesting that the real estate market in Munich is on the move.