Published in September 2018 Munich - Residential City Profile - JLL

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Published in September 2018 Munich - Residential City Profile - JLL
Residential City Profile

Munich
Munich | 1st half of 2018
Published in September 2018
Housing market Munich

Ongoing excess demand foreseeable despite new-build                                     der 5%, the supply of housing increased by just 3.5%. In
activity approaching official urban planning targets                                    2017, the number of building permits granted reached its
Munich recorded a population growth of just over 4% bet-                                highest level for the past 10 years, with Munich’s building
ween 2013 and 2017, mainly due to positive net migration.                               authorities approving the construction of around 13,500
The city gained more than 60,000 inhabitants during this                                apartments – double the number of building permits gran-
period. A comparison of household growth with the deve-                                 ted in 2016. In its Housing in Munich VI housing policy ac-
lopment of housing supply indicates an increasing housing                               tion programme, the city recently revised its new construc-
shortage: while the number of households rose by just un-                               tion target to 8,500 apartments per annum, 2,000 of them
                                                                                        in the publicly-subsidised and price-controlled segment.
                                                                                        As early as 2017, an above-average number of new apart-
Housing supply and demand for                                                           ments of almost 8,300 units came onto the market and it
new buildings Munich                                                                    seems likely that the city’s target can be reached by 2018.
                                                                                        So far, the city has met the high demand on the housing
                                                                                        market primarily by designating and releasing new building
                                                                                        land on the outskirts of the city, and by converting brown-
                                                                                        field sites. This is because large new building projects would
                                                                                        be difficult to achieve in the city centre due to the already
                                                                                        high building density. Compared to other large cities, Mu-
                                                                                        nich offers a wide range of planning instruments to promote
                                                                                        new construction and affordable housing. However, the
                                                                                        use of these instruments and the momentum in construc-
                                                                                        tion activity are likely to only partially ease tensions in the
                                                                                        housing market. Considering the forecasts for further popu-
                                                                                        lation and economic growth, and given the demand back-
                                                                                        log from recent years, the problem of excess demand is un-
                                                                                        likely to diminish over the coming years.

Source: destatis, BBSR housing forecast, Municipal statistical offices, JLL;
Status: July 2018.

  Selected developments under constructions

  Name                                                       Location                                    Residential units        Completion date

  Quartier Paul-Gerhardt-Allee                               Pasing-Obermenzing                            approx. 2,400                2021
  Stadtquartier Am Südpark                                   Thalk.Obersendl.-Forsten-Fürstenr.-Solln      approx. 1,440                2019
  Stadtquartier DiamaltPark                                  Allach-Untermenzing                           approx. 800                  2020
  Stadtteilentwicklung Prinz-Eugen-Kaserne                   Bogenhausen                                   approx. 600                  2020
  Domagk-Quartier Funkkaserne                                Schwabing-Freimann                            approx. 590                  2018

Source: JLL; Status: July 2018

Residential City Profile | H1 2018                                                                                                      Munich 2
Stable but high rental levels in city centre locations
                                                  In the first half of 2018, the average asking rent for apart-
                                                  ments reached €19.25/sqm/month (+3% compared to
                                                  the first half of 2017). Compared to the same period last
                                                  year, the prime rent decreased by €0.10/sqm/month from
Distribution of rental listings by price group    €30.00/sqm/month across the city. Conversely, the bottom
                                                  rental price segment recorded an increase of approximately
                                                  3.7% to reach €14.10/sqm/month. Analysed over a 12-month
                                                  period, expensive locations in the centre and north of the
                                                  city have observed stagnating asking rents, low growth rates
                                                  and declining rents. This is likely to be due to the expansion
                                                  of the housing supply in the comparatively inexpensive re-
                                                  sidential areas, which appeal to potential tenants as alter-
                                                  natives to high-priced locations. As a result, rents rose shar-
                                                  ply in the south, southwest and west of the city. Rents in
                                                  the West submarket increased by 7% in the bottom price
                                                  segment and 17% in the top segment, whereby the lowest
                                                  rental level across all price segments still exists in this sub-
                                                  market. Despite increased construction activities, the ave-
                                                  rage rent for new apartments remained stable at €20.00/
                                                  sqm/month in the first half of 2018.
Source: IDN immodaten, JLL; Status: July 2018

Rental price bands for listed apartments Munich   Development of rental prices

Source: IDN immodaten, JLL; Status: July 2018     Source: IDN immodaten, JLL; Status: July 2018

Residential City Profile | H1 2018                                                                 Munich 3
Asking rental prices Munich

                                                                                    ìA 92

                                                                                                                                          ì
                                                                                                                                          A9

ìA8

                                                                            ìA 99
                                                                                                                      ì A 99

                                                                       Feldmoching-
                                                                        Hasenbergl

                                     ìA 99                                                                               ì     A9

                        ì A8                                                                 Milbertshofen-
                                                                                                Am Hart        Schwabing-                          ì
                                                                                                                                                   A 99
                                                Allach-
                                                                                                                Freimann
                                             Untermenzing
                                                                     Moosach
                                                                                                                                                                    ìA 99

                         Aubing-                                                              Schwabing-
                       Lochhausen-                                                               West
                        Langwied                                       Neuhausen-                                                    Bogenhausen
                      ìA 99
                                               Pasing-
                                             Obermenzing
                                                                      Nymphenburg
                                                                                         Maxvorstadt
                                                                                                   Altstadt-
                                                                     Laim   Schwanthalerhöhe
                                                                                                     Lehel                                             ì  A 94

                                                                                     Ludwigsvorstadt-       Au-
                                                                                                        Haidhausen                  Berg am        Trudering-
                                             ìA 96                                      Isarvorstadt                                 Laim            Riem
                                                                         Sendling-
          ìA 96                                         Hadern           Westpark       Sendling

                                                                                                          Obergiesing                Ramersdorf-
                                                                                             Untergiesing-
                                                                                                                                       Perlach
                                                                                              Harlaching
                                                               Thalkirchen-Obersendling-
                                                                      Forstenried-
                                                                   Fürstenried-Solln                                                                                 ì A 99

                                                        ì   A 95                                                                    ìA8

                                                                                                              ì
                                                                                                              A 995

  0                           5                       10 Kilometers

                                                                                                                                                   ì
                                                                                                                                                   A 99

 Rent Level
 Average in €/sqm/month on postcode level

        < 18.00                                      22.00 < 24.00                                 Water Area                                      Industrial or
                                                                                                                                                   Traffic Area
        18.00 < 20.00                                >= 24.00                                      Green Area                                      Other Area

        20.00 < 22.00

 Source: JLL, IDN Immodaten GmbH, Infas Geodaten GmbH

Residential City Profile | H1 2018                                                                                                                               Munich 4
High purchase price growth not only in the
                                                high-priced submarkets
                                                The average asking price for condominium apartments ac-
                                                ross all price segments, locations and years of construction
                                                is €7,250/sqm, an increase of almost 7% y-o-y. Prices in the
Distribution of condo listings by price group   prime segment rose by just under 6.0%, while apartment
                                                prices in the bottom price segment increased by around
                                                3.0%. The sustained high demand for residential property
                                                drove up purchase prices in all city districts without excep-
                                                tion. The high-priced submarkets are also recording high
                                                growth rates. Over €11,600/sqm can now be achieved in
                                                the top price segment in the southern city centre. In the
                                                first half of 2017, purchase prices here were 19% lower. At
                                                the same time, potential buyers are also shifting their focus
                                                to locations previously less in demand, and to older resi-
                                                dential properties. This is reflected in above-average price
                                                increases, especially for existing apartments built between
                                                1961 and 1975. As a result, new apartments (built since 2013)
                                                were being offered at a significantly lower price in the first
                                                half of 2018 than in the first half of 2017. Especially in city
                                                centre locations, purchase prices decreased by 10.0–13.0%
                                                to €6,900-8,900/sqm.
Source: IDN immodaten, JLL; Status: July 2018

Purchase price bands for condominiums Munich    Development of purchase prices for condominiums

Source: IDN immodaten, JLL; Status: July 2018   Source: IDN immodaten, JLL; Status: July 2018

Residential City Profile | H1 2018                                                              Munich 5
Asking condominium prices Munich

                                                                                    ìA 92

                                                                                                                                          ì
                                                                                                                                          A9

ìA8

                                                                            ìA 99
                                                                                                                      ì A 99

                                                                       Feldmoching-
                                                                        Hasenbergl

                                      ì
                                      A 99                                                                               ì     A9

                        ì A8                                                                 Milbertshofen-
                                                                                                Am Hart        Schwabing-                          ì
                                                                                                                                                   A 99
                                                Allach-
                                                                                                                Freimann
                                             Untermenzing
                                                                     Moosach
                                                                                                                                                                    ìA 99

                         Aubing-                                                              Schwabing-
                       Lochhausen-                                                               West
                        Langwied                                       Neuhausen-                                                    Bogenhausen
                      ìA 99
                                               Pasing-
                                             Obermenzing
                                                                      Nymphenburg
                                                                                         Maxvorstadt
                                                                                                   Altstadt-
                                                                     Laim   Schwanthalerhöhe
                                                                                                     Lehel                                             ì  A 94

                                                                                     Ludwigsvorstadt-       Au-
                                                                                                        Haidhausen                  Berg am        Trudering-
                                             ìA 96                                      Isarvorstadt                                 Laim            Riem
                                                                         Sendling-
          ìA 96                                         Hadern           Westpark       Sendling

                                                                                                          Obergiesing                Ramersdorf-
                                                                                             Untergiesing-
                                                                                                                                       Perlach
                                                                                              Harlaching
                                                               Thalkirchen-Obersendling-
                                                                      Forstenried-
                                                                   Fürstenried-Solln                                                                                 ì A 99

                                                        ì   A 95                                                                    ìA8

                                                                                                              ì
                                                                                                              A 995

  0                           5                       10 Kilometers

                                                                                                                                                   ì
                                                                                                                                                   A 99

  Condominium price level
 Average in €/sqm on postcode level

        < 6,000                                      8,000 < 9,000                                 Water Area                                      Industrial or
                                                                                                                                                   Traffic Area
        6,000 < 7,000                                >= 9,000                                      Green Area                                      Other Area

        7,000 < 8,000

 Source: JLL, IDN Immodaten GmbH, Infas Geodaten GmbH

Residential City Profile | H1 2018                                                                                                                               Munich 6
Contacts
Dr. Konstantin Kortmann                                                   Thomas Zabel                                                               Ralf Kemper
Head of Residential Investment                                            Head of Residential Development                                            Head of Valuation & Transaction
Germany                                                                   Germany                                                                    Advisory Germany
Frankfurt                                                                 Berlin                                                                     Frankfurt
tel +49 (0) 69 2003 1390                                                  +49 (0) 30 886600 115                                                      tel +49 (0) 69 2003 1092
konstantin.kortmann@eu.jll.com                                            thomas.zabel@eu.jll.com                                                    ralf.kemper@eu.jll.com

Helge Scheunemann                                                         Roman Heidrich                                                             Sebastian Grimm
Head of Research Germany                                                  Team Leader Residential Valuation                                          Team Leader Residential Valuation
Hamburg                                                                   Advisory Berlin                                                            Advisory Frankfurt
+49 (0)40 350011 225                                                      Berlin                                                                     Frankfurt
helge.scheunemann@eu.jll.com                                              tel +49 (0) 30 203980 106                                                  tel +49 (0) 69 2003 1196
                                                                          roman.heidrich@eu.jll.com                                                  sebastian.grimm@eu.jll.com

Author
Jirka Stachen
Research
Berlin
tel +49 (0) 30 203980 151
jirka.stachen@eu.jll.com

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