Market Report - Rentals and Real Estate Sales

Mr. Lodge opens new branch in Rottach-Egern

On August 1, we open a new branch in Rottach-Egern under the management of Petra Berger for the region Tegernsee & Oberland. We offer the usual extensive range in the area of rental and sales. Specifically, our team can help owners rent out their apartments on a temporary basis - with shorter rental periods starting at one month. Thus, we also offer owners of vacation homes or second homes an attractive alternative far away from classic vacation rentals, which are associated with frequent changes and are very seasonal. Here, temporary furnished rentals with shorter periods starting from one month open up interesting possibilities especially for second home owners. During the time they cannot or do not want to use their apartment, specialists and executives rent the accommodation. For employees in the greater Munich area, a temporary residence in a vacation landscape that is unparalleled in Germany will be a desirable alternative.

For sellers of real estate in this region, we will be a professional partner in the future.  Whether it is valuation, marketing or renting, our experts will take care of the entire process.

We look forward to welcoming you at our new address! Ulrich-Stöckl-Str. 11 | 83700 Rottach Egern  
Petra Berger, Branch manager Rottach-Egern | T.: 08022 981 31-0 | petra.berger@mrlodge.de

Strengthening economy, rising vaccination rates, confidence: demand for temporary furnished apartments has recovered in recent months and the supply of apartments has further reduced. We see stronger demand, almost at pre-Covid levels. Nevertheless, the market remains burdened or very vulnerable, as the daily news shows. Entry from important countries such as the USA, China or India continues to be difficult. Hardly anyone would have expected that in the summer of 2021, travel through Corona would still be affected and we are already talking about a possible 4th wave in the fall. Currently, we are observing an easing of the market from the landlord's point of view. Larger apartments (3-bedrooms and up) are scarcer than in previous years. The increased space requirements of some prospective tenants have not changed.

Outlook for the housing market: More jobs, more people looking for apartments

As a result of the increased hiring of personnel by Munich companies, there will again be an increase in the number of people moving into the city in the coming months. We therefore expect a further decline in the supply of apartments and falling vacancy rates.
The statements on apartment buildings in past market reports are more valid than ever. Large and small projects still planned will continue to be built and completed step by step. This means that for smaller apartments, the supply of temporary housing continues to rise. Even before Covid, we had pointed out the enormous number of units coming onto the market. The leasing environment remains challenging, especially in this segment, also with regard to the further course of the pandemic. This applies in particular to residential units that do not meet today's requirements in terms of quality and furnishing.

Short-term rentals possible

To round off our service, we will in future also be offering apartments and houses on the market for a few months (rental period 1 to 5 months). In Munich, these are mainly apartments by commercial providers, which may explicitly be rented for up to 6 months only. Landlords of private apartments are allowed by the city of Munich to rent for 6 months or more. In the Tegernsee & Oberland region, these are classic, approved vacation apartments that can also be rented out for short periods of time. We will be able to serve these customers as well from now on.

Real estate sales continue to develop positively. In the 1st half of the year, Mr. Lodge was able to continue the growth and help more owners to place their properties on the market at further increasing prices. For the next months we expect a lively interest in selling and buying in Munich and the surrounding area. Owners benefit from our comprehensive service. Every week, the media report further price increases, which are expected to be somewhat lower in Munich than in other locations in view of the level already reached. Future estimates of the influx of new residents to Munich and their actual number will be significant. This is difficult to assess at the present time. Anticipated inflation is triggering additional interest in investing in tangible assets. Poorer financing conditions could be a disadvantage, further impeding the acquisition of real estate. We monitor the market on a daily basis.

Our sales team is happy to support you throughout the entire sales process with many years of experience, expert knowledge and a unique range of services in the greater Munich area and, since August, in the Tegernsee & Oberland region.

Due to the continued strong demand from owner-occupiers and capital investors, we are urgently looking for apartments, houses and plots of land.

Our real estate department is happy to advise you: Sales Manager: Peter Sarta, Office Manager Jacqueline Sauren, Bernd Wedemeyer , Dr. Cornelia Koronakis, Thomas Engel,  Edda Pucher and Petra Berger in Rottach-Egern
Tel: 089 340 823 540 | verkauf@mrlodge.de

The city of Munich has approved more apartments in the period from January 1, 2021, to May 31, 2021, compared with the previous year. In almost all counties, however, the trend so far this year has unfortunately been negative. Only the districts of Miesbach and Rosenheim stand out positively, however. Permits increased by 60.1 percent in the Miesbach district and by 16.2 percent in the Rosenheim district. It can be assumed that many developers are becoming more cautious in implementing construction projects, as prices for building materials have risen massively in recent months.

Period 01.01. to 31.05.2021 in detail (change compared with prior-year period):

Source: Bavarian State Office for Statistics

In the first five months (05/31/21), population development in the state capital stagnated or there was a slight decline to 1,561,505 primary residents (for comparison, 12/31/2019: 1,560,042 residents).

Source: City of Munich

Over the past few months, we have seen a lively interest in our new service, the brokerage of unfurnished apartments. Whether professional capital investors or owner-occupiers who no longer wish to live in their property themselves: Especially landlords who are not on-site benefit from our comprehensive service.

Our landlord advisory team is here to help:
Lisa Hessner, Steven Meyer, Veronika Schimon, Kirsten Mahdi and Kevin Radde
Furnished rentals: Tel: 089 340 823 50
Unfurnished rentals: Tel: 089 340 823 44
vermieterberatung@mrlodge.de

According to the brokerage firm SAVILLS, leasing transactions on the Munich office property market have almost halved compared to 2019. Accordingly, 191,600 square meters were leased in the 1st half of 2021 compared to 369,300 square meters in the first half of 2019. In general, vacancies are expected to rise, currently standing at 3.6 percent. While this is still low, it is significantly more than the de facto full occupancy with a vacancy rate of less than two percent, which has long characterized the Munich market and hardly allowed any movement.

For the second half of the year, brokers expect a noticeable revival. Various companies have already announced their intention to use large office spaces more efficiently and to continue the home office trend on a reduced scale. From today's perspective, it is not yet possible to predict the extent to which the current 20 million square meters of office space in Munich will continue to be used to the current extent in the future or whether a conversion to residential space will take place on a larger scale in the coming years. If only 10 percent of the space were rezoned, up to 50,000 new apartments could be created.

Unemployment in Munich in June 2021 was 49,013 - a rate of 4.6 percent or 8.5 percent below the previous year. The stock of job openings is 21.8 percent above the previous year and 32 percent below pre-crisis levels. On Stepstone, job ads in the Munich area are 75 percent above the January level. This shows a strong recovery.

Source: Federal Employment Agency Munich, Stepstone

The extreme lows in financing conditions are a thing of the past. Conditions have increased significantly. On a long-term average, however, interest rates are still favorable. The current best values are still below one percent for ten-year loans. The values refer to a 50% loan to value with € 400,000 purchase price and 2% repayment and represent an orientation.  (Source: Interhyp - www.interhyp.de).