Expert warns: real estate prices have passed their peak - at least for the time being

Created: 06/28/2022, 05:42

By: Thomas Schmidtutz

Starnberger See: The prices for real estate in the region on the edge of the Bavarian Alps are almost as high as in Munich.

© Photo booth / Fritsch / Imago

Rising interest rates, high material costs: The rapid growth in real estate prices in and around Munich is likely to slow down.

However, it has become more expensive.

Munich - Real estate prices in Munich and the surrounding districts have risen again since autumn last year: "The price increase is between 2.3 percent in the Erding district and 8.6 percent in the Freising district," explains Stephan Kippes, head of the IVD Institute for Real Estate Market Research.

This makes the district of Fürstenfeldbruck the only one in which a single-family house costs less than one million euros at an average of 970,000 euros.

The jumps in the district towns are even more extreme: In the – by far – most expensive district town of Starnberg it is a smooth two million and “in the city of Munich priceless 2.2 million”, according to Stephan Kippes.

The pandemic has changed demand.

Because more and more people are working from home, they want more space.

"In addition to properties with their own balcony, terrace or garden, there is also a demand for properties that offer sufficient space for working from home," explains the real estate expert.

Real estate: Solar systems and charging stations for electric cars are in demand

In view of rising energy prices, the insulation of buildings would also become more important.

But solar systems and electrical charging infrastructure at the parking spaces are also in demand and will also be paid for.

With interest rates rising, many people are taking a closer look.

“Price corrections may occur in the coming months, especially for problematic properties,” says Kippes.

What is meant are objects that are on a busy road or are badly cut.

“So far we have two or three properties for which we have not received any inquiries.

Then you have to say to the owner: rather lower the price by 100,000 euros,” explains Martin Windisch, a broker in the Fürstenfeldbruck district.

S-Bahn network in the greater Munich area: square meter prices for condominiums/stock in the S-Bahn area spring 2022. © IVD

Real estate: Many owners still want to take advantage of the high price level and cash in

His conclusion: The purchase prices have passed their peak for the time being.

Because of the increased building interest, fewer and fewer people can afford their own home.

At the same time, the material costs for many building materials have risen by a double-digit percentage within six months.

Money that is no longer available for the building land in many projects.

Because of the changing environment, more owners want to sell in order to take the still high prices with them.

Overall, this is at the expense of market prices.

The rise in rents has traditionally been more moderate.

They range between EUR 13.10 per square meter in Ebersberg and EUR 14.50 in Dachau.

The district town of Starnberg is far outside this field with 17.90 euros.

It is more expensive only in the city of Munich at 18.30 euros.

Prices rose the most in the relatively inexpensive district town of Ebersberg, up 2.3 percent.

In the associated district and neighboring Erding, there is the largest proportion of apartments with low square meter prices in the Munich area.