Real estate market report - rental and sales

In our current market report, we would like to inform you about the following topics:

• Strong demand in the furnished housing market
• Sales: More restrained interest in buying
• Building permits Munich and districts
• Population development in Munich: Strong growth
• Upward trend on the Munich office market
• Labor market development in Munich
• Steeply rising interest rates

Munich has experienced a very strong influx in the 1st half of 2022. The number of residents has increased by more than 20,000. Companies and institutions are continuing to look for more skilled workers and are initiating more projects. We are also feeling the effects of the Ukraine war. Many people are fleeing (moving) to Munich from Ukraine and other countries. The entire housing market is very tight and especially the demand for furnished apartments is at a very high level. We see a very tight supply in all segments.

For landlords, there is the question of the right approach when it comes to maintaining the value of the property. The expectation of high energy costs and rising maintenance costs are keeping property owners busy. At Mr. Lodge, we provide advice on a daily basis.

In the future, when leases are signed and contracts are renewed, we will inform tenants of various ways to save energy through a contract addendum: Energy Saving Tips in Your Four Walls. We will also communicate this more in our regular tenant newsletter in the future.

We have also put together some tips for you as a landlord on how to furnish your apartment or house in an energy-saving way. The equipment should be well thought out in order to make your future tenants' home as energy-efficient as possible: Energy saving tips for landlords

Across the board, we are committed to greater sustainability and climate protection in the future: On site in the office, in the fulfillment of our service, as well as privately.

Offer development at Immoscout24

The offer has further reduced. The numbers in the section "rental apartments" :

• Feb 2022: approx. 1,900 properties
• July 2022: approx. 1,600 properties (previous year: 2,830).

Rental Outlook:

Due to the influx and strong job market, we expect demand for furnished apartments to remain strong. In our view, supply will remain very tight. As a result, there will be apartment seekers who consider buying as an alternative. This will support the continued very good real estate economy in Munich.

Our landlord advisory is here to help: Luisa Hönig, Louisa Kuß, Kevin Radde, Lisa Hessner, Steven Meyer, and Jenni Nguyen: Unfurnished rental: 089 340 823 50 | Furnished rental: 089 340 823 44 | vermieterberatung@mrlodge.de

The news of recent weeks and months has been a drag on the entire real estate market. In the wake of the Ukraine war and pandemic, there have been massive increases in interest rates, energy, utility and living costs. This is not a good mixture for too much optimism in the real estate market. On the other hand, we are currently seeing a massive influx into the greater Munich area again and a continued high willingness to hire on the part of Munich employers. Rental apartments and, in particular, furnished apartments are scarcer than they have been for many years. Housing is therefore still urgently needed. Due to a shortage of materials and rising construction costs, some projects will be delayed or shelved altogether, so new construction is unlikely to ease the situation.

The reluctance of prospective buyers is nevertheless noticeable. This has led to a sharp increase in supply in recent months. In the 2nd quarter the offer on Immoscout increased by approx. 50%. Nevertheless, apartments and houses in sought-after, non-replicable locations continue to be sold quickly if the price/performance ratio is right. Decisions, including those of banks, are generally slower to come. It is hard facts that affect the market: Interest rates have risen 2.5 to 3 points in just a few months. Utilities such as heating, hot water and electricity have gone up (or are expected to go up dramatically). Services and building materials needed to maintain properties are also becoming more expensive. The homeowner's own cost of living is also becoming much more expensive. To account for these issues, a revaluation is occurring in the real estate market. As a result, the purchase price expectations are no longer increased, but are partly adjusted, and even respectively reduced.

The purchase offer in the 2nd quarter on ImmoScout24 :

Apartments for sale - + 51%.

• April: 1,728
• June: 2,114
• July: 2,612 (previous year 1,560)

Houses for sale - + 49%

• April: 279
• June: 317
• July: 416 (previous year 200)

There are still many reasons to buy a property. Interest rates are still at a relatively low level compared to high-interest periods. The opportunity to buy a particular property often only comes around once. Waiting usually means that the property will be sold to someone else.
Real estate as an investment in value is considered a stable and secure investment over the long term. You can count on stable income to secure your old age. There is hardly any other investment where you can create property with a relatively high share of borrowed capital.

We accompany the sales process for the real estate sellers and prospective buyers professionally and with the highest commitment.

Our sales team is happy to support you throughout the sales process with years of experience and expert knowledge.

Our real estate sales team is happy to advise you: Bernd Wedemeyer, Dr. Cornelia Koronakis, Jacqueline Sauren, Edda Pucher, Thomas Engel and Peter Sarta with Julia Chmurnov and Samira Carl (not pictured)  Tel: 089 340 823 540 | verkauf@mrlodge.de

The first four months of 2022 show a mixed picture in the Munich region and the districts in Upper Bavaria. Overall, the number of apartments approved declined by 13% in the following districts and the city of Munich.
Period 01.01. to 30.04.2022 in detail (change compared with the same period of the previous year):

Source: Bavarian State Office for Statistics

The population in the city of Munich grew rapidly in the first few months after a long period of widespread stagnation:

• June 2022: 1,583,149 (private households: 844,418)
• Dec 2021: 1,562,128 (private households: 833,926)

Balance compared with Dec 2021: + 21,021 inhabitants (private households: +10,492)

Source: City of Munich

Brokerage BNP PARIBAS REAL ESTATE reports a 67% year-on-year increase in office leases to 391,000 sqm in the first half of the year (10% above the long-term average). The vacancy rate has increased moderately. Despite the Ukraine war, a promising 2nd half is expected.

Source: BNP PARIBAS REAL ESTATE, JLL

On the STEPSTONE portal, job vacancies have stabilized at a high level, amounting to around 16,000 jobs in mid-July 2022 (previous year: 13,100). Unemployment in Munich stood at 49,506 in June 2022, a rate of 4.6 percent. The Federal Employment Agency's job inventory fell to 9,074 in June (-28%).

Source: Federal Employment Agency Munich, Stepstone

Prospective real estate buyers in need of financing are still benefiting from historically low interest rates, but conditions have worsened significantly compared with 2021/2020. In addition, banks are being urged to lend more restrictively. Here are the current values, based on a 50% loan-to-value, with a purchase price of € 400,000 and 2% repayment (these values are without guarantee and are merely a guide).

Source: Interhyp - www.interhyp.de