Researched findings reveal a distressing trend in Munich: Identified citizens facing significant property losses
In the heart of Germany, Munich continues to be a real estate hotspot, outshining other regions in the country. Despite facing a housing problem, Munich ranks third among all German regions due to its high proportion of academics, strong Industry 4.0 presence, employment in arts and culture, high patent activity, and good broadband coverage.
Munich's real estate market is characterized by strong price trends and robust demand, making it notably more expensive and less affordable compared to other regions in Germany. The city is Germany's most expensive city for residential real estate, with apartment prices exceeding €7,273 per square meter. This high price is largely driven by a strong life-science and semiconductor industry cluster, which buffers the market against macroeconomic shocks.
Prime rents for industrial/logistics properties in Munich have surged significantly, with a 29% increase to €13.50/m² recorded in the first half of 2025, highlighting strong demand and limited supply of large spaces. The city sees rapid absorption of vacant large commercial spaces, reflecting intense market activity and growth in large-scale transactions, particularly in Northern Munich.
Compared to other major German cities like Berlin, Frankfurt, or Hamburg, Munich retains its top position in price levels, even as regions like Leipzig experience faster growth due to more competitive pricing and infrastructure improvements. According to forecasts, housing prices in Germany overall are expected to increase around 3% annually through 2025 and 2026, but this general growth still leaves Munich as a high-cost outlier.
When comparing Munich's real estate market to other countries like the United States, German city centers, including Munich, tend to have higher price per square foot to buy apartments, reflecting stronger affordability challenges in Munich. However, despite high prices, Munich remains attractive for long-term investment due to strong rental demand and economic fundamentals, similar to Frankfurt.
The city's real estate prices are so high that they are driving families out of the city and into the surrounding areas. A 360,000 euro investment buys an 117-square-meter apartment nationwide, but only 43 square meters in Munich. In particularly expensive areas like the Graggenauer Quarter, a 360,000 euro investment buys only 25 square meters.
The study "Living in Germany 2025" shows an alarming supply gap, as by 2030, 73.8 new apartments per 1,000 residents should be created annually, but only 11.8 completions per 1,000 existing apartments are realized. Munich's surrounding districts (Starnberg, Miesbach, and Munich) have square meter prices between 7,558 and 8,188 euros.
Despite these challenges, Munich remains a magnet for young talent due to jobs, universities, and an urban lifestyle. Young adults aged 18 to 30 are flocking to Munich at a rate of 72 newcomers per 1,000 residents annually, more than double the national average. Peter Berger, CEO of Sparda-Bank Munich, states that Munich remains a magnet for young talent due to jobs, universities, and urban lifestyle.
In conclusion, Munich's real estate market is a premium, high-demand market within Germany with limited affordability relative to other regions. Price and rent trends indicate continued strong upward momentum, making it one of the costliest real estate markets in the country. While other German cities offer more affordable alternatives with varying growth prospects, Munich's economic clout and limited supply keep prices elevated.
In light of Munich's high real estate prices, many individuals might consider alternative investment opportunities to secure their personal-finance, such as investing in stocks, bonds, or other financial assets.
Munich's strong real-estate market, characterized by robust demand and high prices, makes it an attractive long-term investment option, especially for those seeking reliable rental income and capital appreciation, despite the challenge of affordability.
