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Market reports

Market report - rentals and real estate sales - Munich, February 2021


Almost a year under the sign of Corona: Many people are directly affected by the closings of restaurants, hotels, shops, service providers and cultural institutions. Everyone is impaired in their attitude to life and their possibilities. How has the real estate market developed as a result?

Despite all the adversities, the housing and real estate market has proven to be relatively robust so far. Home ownership prices are stable across Germany and have continued to rise in many cities and suburbs. Many people have become even more aware of the value of a beautiful apartment as a retreat and home. The corona pandemic has also meant that many people are on the lookout for somewhat larger objects in order to be able to better integrate the home office into everyday life, for example. This also applies to the Munich location: real estate as an investment or for personal use is still very popular and trust in the Munich location and the surrounding area is still excellent. The inflation expectations, which have been intensified in the past few weeks, are likely to do their part to additionally focus on tangible assets such as real estate.

Furnished housing market

Since the second lockdown, the demand for furnished apartments has cooled again, but the picture is mixed. We see weaker demand for 1-room apartments in particular. The oversupply caused by the many newly built apartment buildings (serviced apartments) is also noticeable. The large apartment buildings and some hotels (if open) try to find tenants for longer rentals at low prices. On the other hand, the first houses are taken off the market or converted. One example are two boarding houses in Schwabing and Neuhausen with 150 units, which the City of Munich rented on a long-term basis in January in order to offer socially disadvantaged people living space.

The supply of 3 to 4 room apartments and houses has become scarcer and at Mr. Lodge is below the previous year's level. One reason: In times of home offices, more prospective tenants are opting for larger apartments.

Development of offers at Immoscout24

Since the beginning of the pandemic, the offer on the Immoscout24 portal has increased continuously.

In the rental apartments category, the following was offered:

  • Mid-March 2020: approx. 1,450 objects
  • Mid-June 2020: approx.2,250 objects
  • Mid-February 2021: approx. 2,600 objects

However, these figures do not (yet) need to be viewed with concern. After years of de facto non-existent vacancies, interested parties have the opportunity to choose from a somewhat larger range for the first time.

Outlook rental housing market:

Companies are already hiring more people again. When the lockdown measures are scaled back, economic activities will be ramped up. The economic upswing after the first lockdown was already quite clear in late summer and autumn and should now start again with a view to the planned vaccinations and easing. We anticipate a positive trend in demand for furnished and unfurnished apartments in all categories over the next few months. We expect a short to reduced offer for furnished 2 to 4 room apartments.

We also expect increased demand for 1-room apartments. Prices will remain under pressure in this segment as new apartment buildings hit the market again this year. In May alone, two larger new openings are planned in Landwehrstrasse and Gmunderstrasse with a total of over 500 units. Hotels will also endeavor to continue to compensate for the decline in overnight stays with attractive long-stay offers.

Are your apartments competitive?

Once again, it shows how important it is that the apartments are modernly furnished and therefore competitive. Mr. Lodge and the landlords we look after have always placed great value on quality and modern, contemporary furnishings for over 20 years. That is why our 4-person team of furnishing consultants is now on the job every day for landlords to find the best possible interior design solutions for their apartments and houses. For the property owner, we make a decisive contribution to avoiding vacancies as completely as possible.

Does your apartment meet the current requirements for design, equipment and comfort? We're here to help.

Contact our installation service: Tel: 089 340 823 563 | [email protected]


Unfurnished rental

A long-standing wish of many customers for years has been that Mr. Lodge also helps with his know-how when renting unfurnished apartments. We take this into account and, since this year, have also been supporting landlords who would like to let their properties empty through Mr. Lodge with new rentals. Our landlords are also supported by our technical service if maintenance and renovation work is required after a long-term rental. If you would like to rent an apartment or a house furnished or unfurnished, please contact our rental team.

Our landlord advice helps: Lisa Hessner, Veronika Schimon, Kevin Radde, Steven Meyer and Kirsten Mahdi: Tel: 089 340 823 77 | [email protected]

Real estate sale by Mr. Lodge

Mr. Lodge was able to significantly strengthen its market position in the previous year. In 2020 we were able to increase sales by 25 percent - at still excellent sales prices for owners. More owners have entrusted us with their properties for sale and were able to benefit from attractive proceeds. They appreciate the all-round support from the evaluation to the optimal presentation, free home staging, support from our technical service and the extensive marketing activities. Mr. Lodge accompanies the entire sales process from the beginning to the handover. We expect the owners to show increasing interest in sales this year as well.

Our sales team will be happy to support you throughout the sales process with many years of experience and expert knowledge. Due to the continued strong demand from self-residents and capital investors, we are also urgently looking for apartments, houses and land.

Commission amount:

Since the end of December, property sellers and buyers of apartments have each been paying half the commission. In Munich, 2 to 3% plus VAT are mainly charged on both sides. We have decided to charge 2% plus VAT for new orders this year.

Tipper:

We are grateful if you recommend Mr. Lodge to acquaintances and friends who want to sell their property. You will receive a tipster commission of 12.5% ​​of our net commission for a successful recommendation. Contact us.

Our sales department will be happy to advise you: Anja Kemmelmeyer, Bernd Wedemeyer, Dr. Cornelia Koronakis, Thomas Engel, Edda Pucher, Office Manager Jacqueline Sauren, Sales Manager Dipl.-Kfm. Banker Peter Sarta
Tel: 089 340 823 540 | [email protected]


The building permits in the greater Munich area

More apartments were approved in the city and district of Munich in 2020. In the districts, there is a predominance of a decline in permits.

Period 01.01. until December 31, 2020 in detail (change compared to the same period of the previous year):

City of Munich10204+3,9%
District of Munich1905+16,0%
Fürstenfeldbruck727-23,0%
Dachau620-21,9%
Ebersberg766+26,8%
Erding859+-0%
Freising992-3,5%
Starnberg678-12,2%

Source: Bavarian State Office for Statistics


Population development: Less immigration

In 2020, 18 percent fewer people moved to Munich due to the pandemic. Nevertheless, there was a small increase in population with 2,054 people. The reason for the increase is the still high birth surplus (over 5,000), i.e. overall there were more births than deaths. The population on December 31, 2020 was: 1,562,096 inhabitants.

Source: City of Munich and Süddeutsche Zeitung


Office market 2020: Corona pandemic is having an impact

The real estate agency BNP PARISBAS REAL ESTATE reports a decrease of 26 percent in office rentals to 568,000 square meters (previous year 770,000 square meters) for 2020. The vacancy rate increases by 26 percent. Compared to the other large locations in Germany, Munich does better, with lettings falling by up to 49 percent in some cases. In view of the structural reorganization in retail and issues such as home office, it is to be expected that the commercial real estate market will lose a lot of price dynamism compared to previous years. Here too, however, it is important to put the consolidation in perspective. In the years before the crisis, the inner-city vacancy rate for offices in Munich had fallen to almost zero percent. Prime rents had reached new record highs.

Labor market in Munich in January 2021

Unemployment in Munich was 53,891 in January 2021 - this corresponds to a rate of 5.0 percent. In January, 1,759 Munich companies reported short-time work for 20,279 employees. The number of jobs at the employment agency fell by 29.8 percent compared to the previous year. Another development can be seen on the STEPSTONE and MONSTER portals: In January and February, 15 to 20 percent more job advertisements were placed in the Munich area compared to the previous months. So staff is being sought. Increasing tendency.

Source: Federal Employment Agency Munich, Stepstone, Monster

Mortgage rates remain at their lows

Those interested in real estate with financing needs continue to benefit from the low interest rate policy of the central banks and the negative yields on German government bonds. The current best values ​​for ten-year loans are still below one percent. The values ​​refer to a 50% loan at 400,000 euros purchase price and 2% repayment and represent an orientation. (Source: Interhyp - www.interhyp.de).

running timeFeb '08Oct '12Sep '16May '19Oct '20Feb '21
5 years4,19%1,73%0,71%0,70%0,42%0,47%
ten years4,48%2,45%0,90%0,86%0,43%0,51%
15 years4,63%2,91%1,34%1,19%0,69%0,77%
20 years  1,57%1,49%0,93%0,97%

We would like to take this opportunity to thank you for the good cooperation even in difficult times. Stay healthy!

Yours Norbert Verbüugeln, Managing Director
T .: 089 340 823 16 | [email protected]