Real estate for capital investment in Munich

Munich has been growing steadily for years – on the one hand due to sustained high birth rates, on the other hand as a result of high immigration. The Bavarian capital currently has a population of more than 1.6 million people. The signs are pointing to growth for the future as well. According to current forecasts, some 1.78 million people will be living in Munich by 2035. This represents a growth rate of almost twelve percent.

The excellent economic situation and the continuing increase in the number of inhabitants ensure a high demand on the housing market. The market in Munich is one of the most expensive real estate markets in Germany. Currently, offered rents in Munich average 22.85 €/m² for new apartments and 20.29 €/m² for existing ones. It should be noted that there are sometimes large differences between the individual districts.

Districts with the highest offered rents (new build):

• Altstadt-Lehel: 42.86 €/m²
• Maxvorstadt: 33.15 €/m²
• Ludwigvorstadt-Isarvorstadt: 30.36 €/m²

Districts with the lowest offered rents (new build):

• Feldmoching-Hasenbergl: 20.80 €/m²
• Allach-Untermenzing: 21.01 €/m²

An interesting development is that according to current demand calculations, the need for new apartments in Munich has slightly decreased. This is due to the large, dynamically growing surrounding area of Munich, which meets part of the demand.

Due to the shortage of living space in the city and constantly rising rents, a trend has intensified in recent years: working in Munich, living in the surrounding area. Since 2016, more than 43,000 people have moved from the city to the neighbouring hinterland. This offers several advantages – especially communities with good transport connections, such as Freising, are an excellent alternative to the big city.

Situated north of Munich, Freising is a place worth living, with short distances to the countryside – the Isar meadows and numerous local recreation areas offer relaxation from everyday life. Furthermore, Freising impresses with excellent local supply. Thanks to the large selection of childcare and educational facilities, Freising is the ideal place to live for families. Last but not least, there are convenient connections to Munich both by public transport and by car.

The increasing attractiveness of the Munich surrounding area is also leading to rising rents in Freising: for a newly built apartment, an average of 17.79 €/m² can currently be expected.

As many other large cities, Munich is subject to the Tenancy Law Amendment Act, or the so-called “rental brake”. It states that rents for new leases in sought-after areas may only be a maximum of ten percent above the local comparative rent.

Exceptions to this rule include new buildings used and rented for the first time after 2014. So, buying a new property gives you more freedom of choice.

By the way: the restrictions of the rental brake also apply in the district of Freising.