It has always been known that Munich is an expensive place: almost 20 euros per square meter - but rent prices elsewhere in Bavaria are also continuously rising.
Berlin/Munich – Munich has long been the most expensive place in the nation. But rental prices in and around the state capital continue to rise. This is shown by an evaluation by the research and consulting company Empirica, which specializes in real estate, and which is available exclusively to our newspaper. Accordingly, rents in Munich are rapidly approaching 20 euros per square meter; they are currently on average at 19.39 euros. The basic rents for offers for renovated apartments with 60 to 80 square meters were evaluated. In Munich they cost on average between 1200 and 1600 euros.
Not surprisingly: Munich remains significantly more expensive than other cities
Munich is therefore significantly more expensive than other German cities. In the next most expensive city, Frankfurt, you currently pay 15.13 euros per square meter, in Berlin it is 14.93 euros and in Stuttgart 14.41 euros. If you also include smaller districts and cities in the evaluation, almost only districts and towns from the metropolitan region around Munich are in the top places.
The Starnberg district, known not only for its beautiful lakes, but also for its wealthy residents, is perhaps no big surprise. The rent here is 15.72 euros. But the fact that the Fürstenfeldbruck and Dachau residents now have to pay just as much rent as the Frankfurt residents, at 15.29 and 15.08 euros respectively, is astonishing. Not even the Miesbach district can keep up with its high density of celebrities and its lakes and mountains. Rents there are 13.18 per square meter.
A map shows where in Germany rents have skyrocketed - and as is so often the case, Munich is the sad leader.
Price explosion in Fürstenfeldbruck and Dachau: Rents up to 58 percent more expensive
Striking: Rents in Munich have increased noticeably since 2014, by 50 percent both in the city itself and in the Munich district. This means that they have risen significantly more than the overall cost of living, which rose by around 25 percent in the same time. But many people apparently went where it was at least reasonably affordable in comparison, namely in the suburbs around the city. In any case, the highest rent increases occurred here.
Over the past ten years, costs for tenants in Fürstenfeldbruck have risen by 58 percent, in Dachau by 62 percent and in Aichach-Friedberg by even 68 percent. Prices in many larger cities in the area also shot up more than in the state capital itself. In Rosenheim, for example, it was 63 percent and in Augsburg 58 percent.
The situation will not improve in the foreseeable future - simply because too few apartments are being built.
Roman Heidrich, real estate expert at JLL
However, the Munich area is far from being the front runner in terms of rent increases compared to Germany. At the front there are many Berlin surrounding communities such as Dahme-Spreewald, Brandenburg an der Havel or Ostprignitz-Ruppin, where it has become around twice as expensive to rent an apartment since 2014. There was also a strong influx into the suburbs in the capital.
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Lower Bavaria: Rents increase by 87 percent
Also among the top performers in Germany: the Freyung-Grafenau district in Lower Bavaria with an increase of 87 percent, Hof with 77 percent and Dingolfing-Landau with 74 percent. However, at seven to nine euros per square meter, living there is still affordable - which is probably why one or two ex-Munich residents end up in areas that are rather remote from the state capital's perspective, which in turn drives up rents there.
The fact that the rental market in Germany is in a difficult situation is not a new finding. Roman Heidrich, residential real estate expert at JLL, also knows this. The rental prices are determined by supply and demand - although supply has not been able to keep up with demand for years, he explains. "The situation will not ease in the foreseeable future - simply because too few apartments are being built," says Heidrich.
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One possible solution: tax cuts for more new construction
So what can be done to bring the escalating rents back to normal inflation rates? According to real estate expert Heidrich, land prices and construction costs are currently easing somewhat. But that alone won't be enough. “New residential construction must become more attractive,” he says.
According to Heidrich, both the private sector and the federal government are responsible. “What would massively support new residential construction would be to reduce the VAT for new rental residential buildings from 19 to seven percent. That would make building new housing significantly cheaper in one fell swoop and it would be a simple and quick lever.”
Unfortunately, it's not quite that simple. The measure would be a state matter, meaning Berlin or Bavaria would have to forego tax revenue, which is unlikely. For this reason alone, the housing market is likely to remain a problem child in the future.