Dream of a 9.99-euro house in Munich burst: company pulls out

Created: 12/29/2022, 7:49 p.m

By: Miriam Haberhauer

Cheaper living space for Munich residents was to be created in Schwabing's creative district.

The order went to Euroboden, but the company is now returning the order.

Munich – Grünwalder Euroboden GmbH is backing down on development in the creative district.

The reason for this is the dramatically increased construction costs and interest rates - cheap living space in Schwabing is no longer possible under these circumstances.

The city is now desperately looking for an alternative.

Inexpensive living space in Munich: Euroboden planned €9.99 living space

The real estate developer Euroboden is actually better known for its luxurious properties.

Founder Stefan Höglmaier has already implemented numerous real estate projects in the luxury segment with his business partners in Munich, Berlin and on Lake Starnberg.

Normal earners can usually only dream of Euroboden projects.

But when the municipal property of the former Luitpold barracks was awarded for development in a reverse bidding process in the summer of 2022, the contract went to Euroboden.

Together with TU professor Florian Nagler, Höglmaier wanted to build two simple wooden houses in the creative district.

The Munich company had undercut the upper rent limit of 13.50 per square meter specified by the city at the time.

Cheaper living space is to be created in the creative district.

© IMAGO/C3455 Robert B Fishman

The square meter in the north of Munich should have cost just 9.99 euros - the sensationally low price was to be made possible by the principle of "simple construction", which dispenses with any luxury and unnecessary details.

The plan was to give 60 percent of the 42 apartments to "systemically important" tenants - including firefighters, police officers, nurses and daycare workers.

The remaining 40 percent should be freely assigned.

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"Decision very much regretted" - City is looking for Euroboden replacement

At the beginning of November, the Grünwald-based company announced that it would "refrain from realizing the 'House for Munich' and would return the contract," according to Euroboden in a press release.

“Both the interest rate and the construction cost landscape have changed significantly since then.

Inflation, war and the aftermath of the pandemic have meant that construction costs have continued to rise and interest rates have risen from less than one percent to more than four percent,” Euroboden explained his decision.

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Architect Nagler and the company had tried to further reduce the construction costs and also looked for new investors for the "project with social returns" - in vain.

"We very much regretted the decision of the company Euroboden to return the contract for the realization of the building areas in the creative field," a spokesman for the Munich planning department told our editorial team.

The offer now lies with the first successor in the tendering process.

"We have not yet received a commitment," said the city of Munich.

"We assume that an allocation to the successors will take place," it said.

But the current circumstances are not getting any easier for either.

"If a commitment is made, the tender conditions of the time will continue to apply," emphasizes the planning department.