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MUNICH

REVEALED: Where rents are rising the most in Munich

The Bavarian capital is already the most expensive city in Germany to rent, with some districts - and types of accommodation - raking in much higher prices than others. A new barometer breaks them down.

Published: 17 July 2023 16:09 CEST
Schwabing
Flats in the Munich district of Schwabing, one of the most expensive for renters. Photo: picture alliance/dpa | Sina Schuldt

You have to be able to afford to live in Munich – and that is becoming increasingly unlikely for many people. Prices are continuing to climb steeply, at least for new apartments, according to the results of the new Munich Housing Market Barometer (Münchner Wohnungsmarktbarometer). 

According to the barometer, the average first-time rent in 2022 was €22.27 per square metre, around four percent higher than in 2020.

READ ALSO: The most expensive (and cheapest) cities in Germany to rent a room

Those who want to live centrally have to dig particularly deep into their pockets. In the central districts of Ludwigsvorstadt-Isarvorstadt, Maxvorstadt, Au-Haidhausen and Altstadt-Lehel, tenants are asked to fork down between €25.60 and €28.30 per square metre. 

However, asking rents in Berg am Laim in the southeast of the city were also over €25 per square metre.

Cheaper offers of a little less than €20 per square metre were found on average outside the Mittlerer Ring, in Feldmoching-Hasenbergl, Hadern or Milbertshofen-Am Hart. 

There is a ray of hope for existing apartments. In 2022, they averaged €19.25 per square metre. This is still high, but less than in previous years (€19.58 in 2020 and €19.96 in 2021). 

Landlords asked for rents of over €21 per square metre in the Altstadt, Lehel, Maxvorstadt and Schwabing. 

The cheapest rents in 2022 were in Feldmoching-Hasenbergl in the most northern part of the city. 

Most flats (8.6 percent) were advertised in the lively Pasing district, just northwest of the city centre. The fewest were offered in the leafy Nymphenburg district, famous for a castle by the same name, and also central Schwanthalerhöhe.

For the Housing Market Barometer, the city examines rents and purchase prices annually. In 2022, the experts evaluated around 27,000 offers published on the internet portal ImmobilienScout24, or Immoscout.

Furnished flats going at more than €30 per square metre

For a while now, furnished flats have been increasingly offered on Immoscout, with landlords charging correspondingly higher rents. 

In 2022, the share was 21.5 percent of all advertisements and the average price for a new flat was  €30.24 per square metre (2020 at €30.44 and 2021 at €27.19). 

Furnished existing flats were even advertised at a slightly cheaper rate in 2022 than in 2020, at an average of €26.46 per square metre.

READ ALSO: Munich landlord fined for charging ‘too little’ in rent

Vocabulary

first-time rent – (die) Erstbezugsmiete

asking rent – (die) Angebotsmiete

to ask for – verlängern

existing apartment – (die) Bestandswohnung 

We’re aiming to help our readers improve their German by translating vocabulary from some of our news stories. Did you find this article useful? Let us know.

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RENTING

Do rising rents make buying a home in Germany a better option?

Across Germany, rents have shot up in the last two years while property prices have fallen. Experts say this is making buying more attractive than renting at the moment.

Published: 19 September 2024 16:48 CEST
Do rising rents make buying a home in Germany a better option?

For several years, property prices in Germany rose at a much faster pace than rents. Between 2016 and 2022, the average price for apartments climbed by a dramatic 76.5 percent, according to an analysis by real estate company ImmoScout 24. During the same period, rents for flats rose by 26.8 percent.

Experts said this was due to comparatively low interest rates and high buyer demand along with limited supply – all of which caused the property market to explode. 

However, this trend has reversed over the past two years, with rental prices rising significantly more than purchase prices.

According to ImmoScout, falling property prices is a big factor. The price index for apartments fell by 9.4 percent between 2022 and 2024, while rents rose on average by 11.7 percent, reducing the difference in price development from a peak of 39.2 percent in 2022 to 12.9 percent this year.

At the same time, the strong pressure on the rental market has resulted in a considerable financial burden for tenants. An earlier ImmoScout analysis from March showed that rental flats in Germany’s 40 largest cities received 21 times more enquiries than owner-occupied flats.

In another study released in summer, real estate experts Jones Lang LaSalle (JLL) found that asking rents for flats in the eight major cities of Berlin, Hamburg, Munich, Cologne, Frankfurt, Düsseldorf, Stuttgart and Leipzig climbed by an average of 6.3 percent in the first half of 2024 compared to the same period last year.

READ ALSO: Rents still rising fast in major German cities

Real estate experts say it means buying a property in Germany has become more attractive.

“The sharp rise in rents in particular is making buying a property as an investment or home more and more attractive,” said Dr Gesa Crockford from ImmoScout. 

The index values for renting and buying have converged even more in Germany’s five largest cities – Berlin, Frankfurt, Hamburg, Cologne and Munich. 

Berlin prenzlauer Berg

Flats in the Berlin district of Prenzlauer Berg. Photo: picture alliance/dpa | Monika Skolimowska

The purchase price of existing flats rose by 65.5 percent between 2016 and 2021, while the rental price only increased by 21.6 percent. From the peak in 2021, prices for apartments have fallen by 2.1 percent, while rents have continued to rise by 28.9 percent. As a result, the gap in price development since 2016 has shrunk from 36.1 percent (2021) to 3.4 percent (2024).

People looking to rent in major cities are not only facing rising rents, but also fierce competition to snag an affordable place to live. 

“In the metropolises, buying has become increasingly worthwhile over the past two years,” said Crockford. “There, the difference between purchase and rental prices has levelled off from 30 percent and more to a low single-digit percentage range.”

Is it better to buy a home than rent?

Choosing to buy instead of renting is of course a personal decision and you have to consider several factors – including whether you can afford the mortgage and extra fees associated with house buying.

That said, property prices are expected to increase again slightly after the dip over the last two years.

READ ALSO: Is autumn 2024 the right time to buy a property in Germany?

However, it should also be noted that tenants rights are strong in Germany so renting can be a worthwhile and savvy way to go, if you can find a home that is affordable to you. 

That goes some way to explain why Germany has one of the lowest level of property ownership in the EU, with just over half of the population owning their own home.

Meanwhile, one study released in 2023 by credit insurer Allianz Trade found that buying property in Germany is “significantly more expensive than renting in Germany”.

Even if rents were raised by the legal maximum of 20 percent next year compared to 2023, the difference between average mortgage repayments and average rents would still come in at €381 per month, said the insurer. 

However, some buyers may consider a home an investment in the long term and rely on the value going up over time – though this, of course, is not guaranteed. 

READ ALSO: How the cost of renting in Germany compares to home ownership

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