Munich property prices have doubled in a decade making it the most expensive place to buy a home in Germany.
Top companies such as BMW, Siemens and Allianz are based in the Bavarian city, helping to make it one of the most affluent in Germany. Economic success has had an effect on property prices, causing them to rocket in recent years.
Today, Munich is Germany’s most expensive city in which to buy property, with asking prices reaching €35,000 per square metre in some exclusive developments, according to Engel & Völkers. The average price per square metre in the city is €7,630, dwarfing the €2,993 in Germany as a whole.
Germany’s property market was hardly affected by the global financial crisis of 2008 and for the following decade was propelled by high immigration, low interest rates and low unemployment.
Well positioned in the centre of Europe and the capital of Bavaria, Munich has attracted professionals both from Germany and abroad, driving population growth of 6 per cent each year since 2012 and causing house prices to rise for the past 15 years.
Thanks to its beer gardens, its proximity to the Alps and the world-class parks, Munich consistently features on lists of cities with the best quality of life.
A studio apartment in a central development close to the historic centre costs about €500,000 while detached family homes sell for up to €20 million.
Among the most sought-after areas is the Herzogpark in Bogenhausen with other desirable neighbourhoods based around the sprawling Englisher Garten, which is even bigger than New York’s Central Park or London’s Hyde Park.
Lehel, one of the oldest quarters, is on the banks of the river and Schwabing, around the Ludwig Maximilian University, is popular with younger, well-off buyers. A four-bedroom apartment in Lehel is on the market for €3.95 million with local agent ImmoGrund Tegernsee.
In Maxvorstadt, popular with expatriates, a five-bedroom penthouse in is on the market with Sotheby’s International Realty for €4.78 million.
Families may prefer detached houses. A six-bedroom house in Haidhausen is on the market with Von Poll Immobilien for €1.715 million. E&V is marketing something a little grander, a five-bedroom mansion in Herzogpark, for €13.9 million.
However, despite the high prices, agents claim that the perpetual requirement for new homes will keep prices from collapsing. ‘Living space continues to be scarce and demand high,” says Florian Freytag-Gross of E&V Munich.
Demand for new homes has created a new market for micro-apartments over the past five years especially in the north of the city, near universities and tech employers such as Microsoft, adds Reiss. Buyers have also turned to formerly unfashionable neighbourhoods such as Milbertshofen, near the Englischer Garten.
Buyers and sellers share estate agents’ fees equally, typically amounting to 3.57 per cent of the purchase price. Property transfer tax is 3.5 per cent. (Total closing costs are around 10-12 per cent)
Munich airport is the second-busiest passenger airport in Germany, and with Munich only an hour by car from Austria and just over two hours from Italy it is popular for overseas property investors looking to travel in Europe, particularly for skiing.
It seems that Munich will continue to be a good base for those overseas property investors who can afford it.