The right time to sell your house in Munich is now
The current developments on the real estate market show a clear picture: The time to buy a home is now. According to a new analysis by the German Economic Institute (IW) The purchase prices for real estate are rising again. In the fourth quarter 2023 The prices for apartments rose on average 0,8 percent and for houses around 0,6 percent compared to the previous quarter. Although the prices are still a little cheaper than last year, the trend clearly points to a recovery in the market. The price decline phase appears to be over, said IW economists Pekka Sagner and Michael Voigtländer.
The reason for this upward trend is this, that this time there is no oversupply of apartments, as has been the case at the end of past real estate cycles. Nationwide there is still a shortage of around 700.000 Apartments, especially in big cities. Despite the real estate boom, too little was built, and new construction has fallen by around half due to rising construction costs and interest rates.
The lack of living space leads to rising rents, the last one by just under 9 percent in new contracts have increased. At the same time, demand from property buyers is slowly returning, as many have gotten used to the higher building interest rates or their income has increased. This makes higher rates affordable again. This means one thing above all for prospective buyers: You have to act quickly.
The situation on the Munich real estate market is particularly surprising, where the prices for the most traded property are, the condominium in stock, since 18 steadily decrease for months. Despite increasing rental demand in a city, which annually up to 20.000 new residents recorded, the prices for this property category fall on average 13 percent. One reason for this is that current loan interest rates, the up to 4,5 percent and deter many potential buyers, to decide to purchase.
Despite these developments, the question remains, whether now is the right time, to buy a property. The average square meter prices for existing condominiums have been up since mid 2022 at about 13 percent decreased. This could be an attractive opportunity for potential buyers, especially in Munich, where the price per square meter is up to mid 2022 at average 9.475 Euro was and now up 8.290 Euro has fallen.
Given these developments, the question arises: To buy or not to buy? For those, who have the financial means, now could be the right time, to make a decision. The South Real Estate Association (IVD) assumes that, that the interest per year 2024 are expected to remain stable, What potential buyers should consider. In comparison, the square meter cost per year 1992 approximately 3.000 Euro, However, the effective annual interest rate for construction loans at that time was 9,71 percent.