Real estate crisis in Bavaria: Prices are falling, pressure on the rental market is increasing

Real estate crisis in Bavaria: Prices are falling, pressure on the rental market is increasing

According to a report by www.br.de, the prices for residential properties in southern Bavarian cities fell between spring and autumn 2023. The evaluations by the real estate association IVD Süd show that prices in Munich have fallen by up to 8 percent, in Augsburg by an average of around 6 percent and in Rosenheim by a good 7 percent.

Few prospective buyers, pressure on the rental market is increasing

According to IVD Süd, overall demand for apartments and houses remains comparatively low, mainly due to the sharp rise in mortgage interest rates. Many prospective buyers tend to prefer to rent, which further increases the pressure on the rental market. The rental price level in Munich, Augsburg, Ingolstadt and Rosenheim is increasing significantly.

The crisis is also becoming entrenched in attractive commuter towns

The real estate crisis has deepened not only in Munich, but also in attractive commuter cities such as Augsburg, Ingolstadt and Rosenheim. Selling properties for sale is difficult because there are significantly more properties on offer and sales times are almost twice as long as before the crisis.

Solvent property developers prefer to rent rather than sell

The market is slower than before and the price expectations of buyers and sellers do not yet match properly. Many owners still have asking prices that are too high, which can lead to lower prices in negotiations. Property developers are increasingly choosing to keep and rent out the properties they have built, rather than selling them at a discount.

Fewer construction projects

The cities examined are seeing a declining number of construction projects, and some projects that have already been approved are being stopped due to the poor economic conditions.

These developments could have long-term effects on the real estate market in southern Bavaria, particularly in terms of price levels, demand and supply of residential properties. The changes could also affect the rental market and construction activity in the region. Real estate experts must continue to closely monitor market developments in order to make well-founded forecasts for the future.