The news is currently being dominated by the corona virus. Previous certainties and outlooks are being put to the test. We take a look back and try - despite many unknowns- to give an outlook. Here below, we have summarized the most important news about the furnished housing market, real estate sales and current market trends.

Last year, we recorded an increasing demand for furnished apartments and houses. In the 1st quarter of 2020, we are also seeing very good demand for furnished apartments, 2 to 4-room apartments and houses. The daily news on the topic of corona has not yet dampened the demand and since the end of February/beginning of March it has been more than 15 percent above the level of the previous year (as of 11.03.2020). At the same time we are seeing a massive increase in the supply of apartments (+70 percent compared to the previous year). Larger furnished apartments and houses remain very scarce compared to the previous year. There was a temporary oversupply in this segment last year.

Offer development compared to the previous year:

• 1-room apartments: +70%
• 2- to 3-room apartments: +15%
• 4-room apartments: -30%
• Houses: -65%

Prediction: In the apartment sector, we expect a further increase in supply with generally declining prices due to further completions of apartment buildings. For larger properties (from 4-room apartments and houses), on the other hand, we expect supply to be too tight throughout the year. Due to the effects of the corona virus, the market will have to adjust to an overall weaker demand in the coming weeks and months (fewer new hires, project postponements and/or shortening of projects). This may lead to a further increase in supply. Poorly booked boarding houses and hotels are also trying to retain guests with favorable conditions. These guests will not be in the market for longer leases for furnished apartments. Mobility restrictions such as flight cancellations or the closure of regions or countries could have further significant effects on the housing market. Against this background, prices are likely to fall overall, especially for small furnished apartments.

Development of rental prices – expectations for 2020:

• 1-room apartment: -5 to -20%
• 2- to 3-room apartments: 0 to -10%
• 4-room apartments: stable
• Houses: stable

Quality of equipment decisive for successful renting:
It is therefore important once again for landlords to offer competitive apartments in a time of great challenges. In quite a few properties, vacancies are due to furniture and fittings that are either outdated or simply not in line with the market. Here, landlords should act consistently. After 10 to 15 years, it is time to take a critical look at the furniture and replace it completely. We recommend the professional advice of our interior designers, who implement optimal solutions for our landlords every day. After new or additional furnishing it leads to an optimal rental income and usually no vacancy.

Our interior design team would be happy to support you, more information can be found here: interior design team. Apartments that have been furnished by our team can be found under reference objects.

Your contact persons in landlord advisory:
Lisa Hessner | Steven Meyer | Kirsten Mahdi | Veronika Schimon
Dietmar Schlüter | Norbert Verbücheln

T.: 089 340 823-44 | E-Mail: vermieterberatung@mrlodge.de
Mr. Lodge GmbH | Landlord advisory | Prinz-Ludwig-Str. 7 | 80333 Munich

Last year, our consultants, photographers and technicians have organized and attended more than 17,000 appointments for our customers. This is what distinguishes our service - in addition to personal support for landlords and tenants.

The topic of corona virus presents us with additional challenges this year. In our 5 offices we normally have over 80 employees. For security reasons, up to 60 of 80 employees are currently working from home. In addition, we try to implement all professional measures to reduce infection risks for employees and customers.

With a considerable delay, the Bundesrat will pass the law to tighten the rent price control on 13.03.2020 and forward it to the Federal President for signature. As a result, from April at the latest it will probably be much easier for all tenants to reclaim overpaid rent for a period of up to 2.5 years. The amendment to the law makes renting more difficult. Errors in the drafting of the rental contract can have strong negative effects.

Strong demand and better supply marked the whole of 2019 and also the first quarter of 2020, with purchase prices remaining at a very high but stable level. However, buyers are becoming more critical. On the seller's side, there are more and more talks about intentions to sell. The market for good offers remains very narrow. Particularly in the current market environment, it is more important than ever that sellers rely on professional brokers who advise then beyond the value growth and support them in the sale.

An overview of your advantages:

• The sales advice is provided by real estate experts with many years of experience
• Excellent presentation of your property by photos in Mr. Lodge top quality
• Virtual tours with 360° and 3D views.
• We prepare real estate for sale through home staging, if it is suitable and desired (this is free for the seller to a certain extent).
• We offer financing consultation and financing brokerage from one source.

Apart from the publishing on popular online portals and on our homepage we can offer an extended, potential buyer circle owing to our many contacts in the real estate market. That includes our current landlords who are interested in additional purchases and/or leaflet advertisement in the property’s surrounding area to attract interested buyers.

In the city of Munich, fewer building permits were issued in 2019 as well. The district of Munich recorded a decline of over 26 percent. Only the districts of Dachau and Erding saw an improvement. The reasons for the restrained development in most of the administrative districts are likely to be the shortage of building land and a more restrained commitment of property developers due to very high land prices.

Time period 01.01. to 31.12.2019 in detail:
(change compared to the same period of the previous year)

• City of Munich: 9,819  -10.7%
• Munich district: 1,642  -26.3%
• Fürstenfeldbruck: 944  -2.3%
• Dachau: 793  +3.4%
• Ebersberg: 604  -4.7%
• Erding: 857  +22.6%
• Freising: 1.027  -28.4%
• Starnberg: 604  -22.3%

Source: Bavarian State Office for Statistics

The population grew slightly more in 2019 than in 2018. The population in Munich increased by 17,831 persons and amounted to 1,560,042 (+1.1 percent) at the end of 2019.

The Munich labor market was in a somewhat weaker state in February. Unemployment rose by 1,123 in February 2020 and is at 37,585 or 3.5 per cent on the same level as February of the previous year. The number of job vacancies (11,215 total) was 13 percent below the previous year's figure.

Source: Federal Employment Agency Munich

The commercial brokers Savills and JLL reported over 20 percent fewer new leases with a total of around 760,000 square meters. This is attributed to a scarcer supply, a weak 4th quarter and fewer major contracts. For 2020 Savills is expecting a declining and JLL a stagnating take-up of space with a further decline in vacancies.

Very positive news came from APPLE and GOOGLE. Both companies are massively expanding their development centers on Karlstraße and Hackerbrücke and plan to hire a further 3,000 employees.
Furthermore, the IAA International Motor Show will be coming to Munich in 2021.

Those interested in real estate with a need for financing continue to benefit from the low interest rate policy of the central banks and the increasing fears of the economy, which have sent interest rates downhill. Financing at interest rates of 0.5 percent is currently not uncommon. The current best figures from March 2020 (effective interest rate). The values refer to a 50% mortgage at € 400,000 purchase price and 2% redemption and are an orientation.