As far as prices for houses and apartments are concerned, Munich is usually way ahead within Germany.
But the city even made it to the top internationally.
In many German cities, especially Munich *, real estate prices have risen sharply in recent years.
To get hold of even one square meter of living space in the Bavarian capital, more than 10,000 euros have to be paid.
Frankfurt's square meter prices have also risen sharply and are reaching similar spheres.
But is it still worth buying?
Most overvalued real estate market: Munich threatened by real estate bubble
A study by the Swiss bank UBS has
filtered out
the most overrated cities worldwide
in the so-called “UBS Global Real Estate Bubble Index”
.
Some of them face a "bubble risk," as they say.
UBS understands this to mean a strong and permanent
deviation of the price level
from the development of income, economic growth or even population migration.
Munich
is the city that is most
severely
affected
by a
bubble risk
in the "Bubble Index" worldwide
- just behind is
another German city,
Frankfurt
.
This means that property prices are even more overpriced here than in metropolises such as New York, Los Angeles or London.
The euro area is generally the region with the most
overheated housing markets
, according to the study.
In many European cities, prices rose by more than five percent last year.
In Munich and Frankfurt, prices have even doubled in the last ten years.
Matthias Holzhey, lead author of the study and head of Swiss Real Estate at UBS CIO GWM, says: “The cities in the bubble risk zone are apparently coping with the corona crisis relatively well.
The local economies in Munich, Toronto and Hong Kong are expected to recover quickly.
But even if there is no broad market correction, the potential for further capital gains is likely to be exhausted.
Above all, the earnings prospects of rented condominiums are poor in view of the record-high price-rent ratios. "
Also interesting
: hefty price for new apartments in Munich: one square meter is worth as much as a new car.
Overpriced real estate prices in Munich - that's how long you have to work for an apartment
As Spiegel writes, the strong local economy in combination with a lack of living space and simultaneous population growth are the main reasons for the overheated real estate market in Munich.
A qualified employee from the service sector would currently have
to raise
around
nine annual
incomes to finance a 60 square meter apartment near the city center.
If you rent an apartment of the same size, it would take 39 years to get the money back.
* Merkur.de is part of the nationwide Ippen-Digital editors network.
Also read
: Sad Munich record: Rent deprives pensioners of most of their income.
"Undeveloped location" and "well preserved": that is what real estate codes mean
"Undeveloped location" and "well preserved": that is what real estate codes mean
List of rubric lists: © dpa / Peter Kneffel