Munich 2023: Financial expert warns of a slump in construction

Munich 2023: Financial expert warns of a slump in construction

According to a report from www.abendzeitung-muenchen.de, things are looking bleak for the real estate market in Munich. After years of high profits for property developers and construction investors, a crisis is now looming. The ECB is increasing mortgage interest rates due to Russia's war of aggression against Ukraine, which increases the costs of energy, building materials and tradesmen's services. This means that potential buyers are holding back and building has become significantly more expensive. The number of building applications has fallen by 31 percent compared to the previous year, and many construction sites are at a standstill.

As an expert in the real estate market, it is my analysis that these developments in Munich will lead to the first bankruptcies of property developers, passive modes for others and general uncertainty. The completion of construction projects will be delayed and the number of vacant rental apartments will decrease. This could lead to an increase in rental prices and a significant slowdown in the city's construction boom.

The construction pit in Sendling, known as Sendlinger Loch, is just one example of the crisis facing many construction projects in Munich. Properties are lying idle, construction sites are at a standstill, and major investors are filing for bankruptcy. The Nordbad, where a new commercial building is to be built, is also showing problems as the investor Sedlmayr Grund is backing out and reducing the number of planned apartments.

This development shows that the real estate industry in Munich is facing major challenges and that the situation could worsen further in the future. It is important that those involved in the industry react to the changes in order to ensure a sustainable and long-term successful future for the real estate market in Munich.