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Yes, the analysis of Munich's property market is included in our pack
Thinking about buying a 3-bedroom apartment in Schwabing? It’s a great area, but you're probably wondering: is now the right time to buy, or should you wait for prices to drop?
And what about long-term investment—should you look into other districts like Maxvorstadt or Glockenbachviertel where property values might appreciate more over time?
In this article, we’ll answer these questions. We know this market quite well - and we have put all our knowledge in the Munich Property Pack.
Will property prices increase in Munich in 2025?
Yes, property prices in Munich are expected to rise in 2025, driven by a combination of high demand and a limited supply of housing.
Backed by our fresh, in-depth market analysis, we’re confident that Munich remains one of the hottest cities globally for both domestic and international investors.
Sure, there are some economic bumps like inflation and rising interest rates, but the main drivers behind Munich’s price growth aren’t going anywhere.
Demand, especially in the prime central areas, still outstrips supply by a mile, making any major price dips a long shot. And let’s not forget—Munich’s status as a cultural, financial, and technological hub keeps drawing in buyers from around the world.
Signals pointing to a property price increase in Munich
Here are some factors suggesting prices could increase:
The shortage of housing construction permits expected in 2025 means fewer new developments will hit the market, particularly in highly sought-after areas. With demand remaining steady, this continued lack of supply will likely push up prices, especially in the city’s central districts.
Munich's strong economy, driven by its robust tech and finance sectors, continues to attract a skilled workforce, increasing demand for housing. This economic strength is expected to persist into 2025, supporting property price growth.
The city's ongoing infrastructure improvements, including enhancements to public transportation, are expected to make Munich even more attractive to potential buyers, thereby increasing property values.
Munich's reputation as a safe and high-quality living environment continues to draw international buyers, particularly from regions experiencing political or economic instability, further boosting demand.
The trend of urbanization and the desire for city living among younger generations is expected to continue, keeping demand for properties in Munich high.
Signals pointing to a property price decrease in Munich
Here are some factors suggesting prices could fall:
Rising inflation and living costs are squeezing household budgets across Germany, and Munich is no exception. As essential goods and services become more expensive, middle-income buyers, especially first-time homebuyers, may be priced out of the market, which could reduce demand for lower and mid-tier properties.
Higher mortgage interest rates, which have risen sharply from the ultra-low levels seen in recent years, are making it increasingly difficult for buyers to secure affordable financing. This particularly impacts those looking to purchase second homes or investment properties, potentially cooling off demand in the broader market outside of the luxury segment.
Economic uncertainties, such as potential global recessions or geopolitical tensions, could impact investor confidence and reduce the number of international buyers looking to invest in Munich's property market.
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If property prices go up in Munich, how much would they increase by?
If real estate prices in Munich were to rise in 2025, the increase would likely be around 3% to 7% of their 2024 values.
Typically, real estate in stable, mature markets like Munich appreciates by approximately 2% to 7% annually over the long term. However, fluctuations can occur depending on factors such as region, season, and property type.
It means that, if you spot a charming 2-bedroom apartment in Schwabing for 850,000 euros today, don't be surprised if it's priced between 875,500 and 909,500 euros this time next year.
To give you a better understanding, here is a table that shows 7 types of Munich real estate properties, their estimated prices in 2024, and projections for 2025 based on potential price increases of 2%, 5%, and 7%.
| Type of Property | Average Price in 2024 (€) | Price in 2025 (2% increase) | Price in 2025 (5% increase) | Price in 2025 (7% increase) |
|---|---|---|---|---|
| Altbau Apartment (60 sqm / 646 sqft) | €900,000 | €918,000 | €945,000 | €963,000 |
| Modern Apartment (75 sqm / 807 sqft) | €1,200,000 | €1,224,000 | €1,260,000 | €1,284,000 |
| Luxury Penthouse (100 sqm / 1,076 sqft) | €2,500,000 | €2,550,000 | €2,625,000 | €2,675,000 |
| Studio (30 sqm / 323 sqft) | €450,000 | €459,000 | €472,500 | €481,500 |
| Loft (80 sqm / 861 sqft) | €1,600,000 | €1,632,000 | €1,680,000 | €1,712,000 |
| Townhouse (150 sqm / 1,615 sqft) | €3,500,000 | €3,570,000 | €3,675,000 | €3,745,000 |
| Investment Property (50 sqm / 538 sqft) | €750,000 | €765,000 | €787,500 | €802,500 |
Everything you need to know is included in our Property Pack for Munich
If real estate prices go up in Munich, which areas are likely to see the biggest increases?
Today, people who want to move to Munich desire the blend of traditional Bavarian charm with modern amenities and a lively social scene, which Glockenbachviertel offers. Hence, we could see a price increase there in 2025.
Also, lately, there's been a shift toward more youthful, vibrant neighborhoods, and Maxvorstadt has really taken off.
We like it when information is clear and easy to digest. So, here’s a table that highlights the areas where prices might rise the most, along with the reasons behind those expected increases. It’s very high-level. If you want more details on a specific area, please check our real estate pack tailored to the Munich market.
| Neighborhood | Level of Increase | Why |
|---|---|---|
| Glockenbachviertel | High | Recent development of luxury housing projects and its increasing appeal to international buyers as travel normalizes post-pandemic, driving demand. |
| Schwabing | High | Expected rise due to limited housing stock, upcoming renovations to heritage buildings, and growing demand for prime properties in central Munich. |
| Haidhausen | Medium-High | Ongoing gentrification and new transport links, along with several planned redevelopment projects in the area, are likely to push prices higher. |
| Bogenhausen | Medium | The shift towards hybrid workspaces is driving demand for residential properties near business districts, combined with new mixed-use developments. |
| Sendling | Medium-High | Eco-friendly urban projects and recent construction of new schools and parks are increasing its attractiveness for families, pushing prices upward. |
| Neuhausen | Medium | Investment in local infrastructure, such as the extension of tram lines and renovation of historic areas, is boosting long-term value. |
| Maxvorstadt | High | Upcoming large-scale urban regeneration projects and improved public transport access are expected to make this area more desirable. |
| Nymphenburg | Medium-High | Its proximity to central Munich, along with new office and residential developments, makes it increasingly attractive to professionals seeking more space. |
| Au | Medium | Gentrification and cultural regeneration projects are attracting new residents, leading to rising prices as the area becomes more fashionable. |
| Lehel | High | As new luxury developments are launched, demand for premium housing among wealthy buyers is expected to further increase property values. |
| Altstadt | High | Upcoming restoration of historic sites and high-profile cultural projects are driving a renewed focus on this central, historic location. |
-The best areas to buy a property in Munich
If I'm looking to invest in real estate, what types of properties should I focus on for the best value appreciation?
In 2025, Munich real estate trends focus on tech-smart, energy-efficient apartments, larger suburban homes for families, properties with outdoor spaces, and eco-friendly buildings—all driving higher demand and prices. Here is a summary.
- Tech-Equipped and Energy-Efficient Apartments:
Driven by remote work and sustainability trends, these homes offer smart technology features and energy-saving systems. They cater to young professionals and tech workers, making them a hot commodity in 2025.
- Family-Sized Apartments in Suburban Areas:
With a growing demand for larger living spaces, especially among families, suburban areas near Munich, such as Grünwald and Pullach, are seeing increased interest. Proximity to green spaces and schools is a major factor driving value.
- Properties with Outdoor Spaces:
Post-pandemic, outdoor spaces like terraces, balconies, or gardens have become highly desirable. In dense cities like Munich, these features offer a much-needed escape and are likely to drive up property values.
- Eco-Friendly Buildings with Low Carbon Footprints:
Munich's commitment to sustainability is boosting demand for eco-certified buildings. Buyers are increasingly valuing properties that align with the city’s green goals, leading to price appreciation in this category.
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