Almost a year under the mark of Covid. Many people are directly affected by closures of restaurants, hotels, stores, service providers and cultural institutions. Everyone's lifestyle and opportunities are affected. How has the real estate market developed as a result?

Despite all the adversity, the housing and real estate market has proven relatively robust so far. Prices for residential property have remained stable throughout Germany and have continued to rise in many cities and suburbs. Many people have become even more aware of the value of a nice apartment as a retreat and home. The pandemic has also led to many people looking for slightly larger properties, for example, in order to better integrate the home office into everyday life. This also applies to Munich as a location: Real estate as an investment or for owner-occupation remains highly popular, and there is still excellent confidence in the Munich location and the surrounding area. The inflation expectations that have been increasingly fueled in recent weeks may do the rest to bring tangible assets such as real estate into focus.

Since the second lockdown, demand for furnished apartments dropped again, but the picture is mixed. We see weaker demand especially for 1-bedroom apartments. The oversupply due to the many newly built apartment buildings (serviced apartments) is also making itself felt. The large apartment buildings and some hotels (where open) are trying to find tenants for longer leases at low prices. On the other hand, the first houses are being taken off the market or converted. One example is two boarding houses in Schwabing and Neuhausen with 150 units, which were leased on a long-term basis by the City of Munich in January to provide housing for socially disadvantaged people.

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

Supply development at Immoscout24

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

In the section rental apartments were offered:

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

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

Rental housing market outlook

Companies are already starting to hire again. As the lockdown measures are scaled back, economic activity is ramping up. The economic upswing following the first lockdown was already quite evident in the late summer and fall and should also start again now in view of the planned vaccinations and relaxations. We expect demand for furnished and unfurnished apartments in all categories to develop positively in the coming months. For furnished 2- to 4-room apartments, we expect supply to be limited to reduced.

We also expect demand to increase again for 1-room apartments. Prices will remain subdued in this segment, as new apartment buildings are coming onto the market again this year. In May alone, two major new openings are planned in Landwehrstrasse and Gmunderstrasse with a total of over 500 units. Hotels will also strive to continue to compensate for declines in overnight stays with attractive long-stay offers.

Once again, we see how important it is that the apartments are equipped in line with the times and are therefore competitive. Mr. Lodge and the landlords we service have always placed great emphasis on quality and modern, contemporary furnishings over the course of more than 20 years. As a result, our team of 4 interior design consultants is now working for landlords on a daily basis to find the best possible interior design solutions for their apartments and houses. We actively and decisively contribute to avoiding vacancies for the property owner.

Does your apartment meet the current requirements in terms of design, equipment and comfort?

We are happy to help you. Our furnishing service: Tel: 089 340 823 563 | einrichtungsservice@mrlodge.de

Many customers have long wished that Mr. Lodge also helps with its know-how in renting unfurnished apartments. Starting this year, we take this into account and also support landlords who wish to have their properties rented out unfurnished through Mr. Lodge when it comes to new rentals. Our technical service is also available to our landlords when maintenance and renovation work is required after many years of letting.

If you too would like to rent out a furnished or unfurnished apartment or house, please contact our landlord advisory team: Lisa Hessner, Veronika Schimon, Kevin Radde, Steven Meyer and Kirsten Mahdi: Tel: 089 340 823 44 | vermieterberatung@mrlodge.de

Mr. Lodge continued to significantly strengthen its market position in the previous year. In 2020, we were able to increase sales by 25 percent - at continued excellent sales prices for owners. More owners entrusted us with their properties for sale and were thus able to benefit from attractive proceeds. They appreciate the all-round support from valuation to optimal presentation, free home staging, support from our technical service and comprehensive marketing activities. Mr. Lodge accompanies the entire sales process from the early beginning to the handover.

We anticipate increasing interest in selling from owners this year as well.

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

Commission rate:

Since the end of December, real estate sellers and buyers of apartments each pay half the commission. In Munich, both sides are mainly charged 2 to 3% plus VAT.

Tipster:

We will show our appreciation 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 brokerage commission for a successful referral. Please contact us.

Our real estate department is happy to advise you: Sales Manager: Peter Sarta, Office Manager Jacqueline Sauren, Dr. Cornelia Koronakis, Edda Pucher, Thomas Engel, Bernd Wedemeyer, Anja Kemmelmeyer and Samira Carl 
Tel: 089 340 823 540 | verkauf@mrlodge.de

More apartments were approved in the city and district of Munich in 2020. A decline in permits predominated in the rural districts.

Period 01.01. to 31.12.2020 in detail (previous year):

Source: Bavarian State Office for Statistics

In 2020, 18 percent fewer people moved to Munich due to the pandemic. Nevertheless, there was a small population increase of 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 as of Dec. 31, 2020 was 1,562,096.

Source: City of Munich and Süddeutsche Zeitung

Brokerage BNP PARISBAS REAL ESTATE reports a 26 percent decline in office leasing in 2020 to 568,000 square meters (previous year 770,000m²). Vacancy is up 26 percent. Compared with the other major locations in Germany, Munich is doing better, with lettings falling by up to 49 percent in some cases. In view of the structural reorganization in the retail sector and issues such as home offices, it is to be expected that the commercial real estate market will nevertheless lose considerable price momentum compared with previous years. Here, too, however, it is important to put consolidation into perspective. In the years before the crisis, the downtown office vacancy rate in Munich had fallen to almost zero percent. Prime rents had reached new record highs.

Unemployment in Munich was 53,891 in January 2021 - a rate of 5.0 percent. Short-time work was reported by 1,759 Munich companies for 20,279 employees in January. The number of jobs at the employment agency fell by 29.8 percent year-on-year. A different development can be seen on the STEPSTONE and MONSTER portals: Here, 15 to 20 percent more job ads were advertised for the Munich area in January and February compared to the previous months. Thus, personnel is looked for. The trend is increasing.

Source: Federal Employment Agency Munich, Stepstone, Monster

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