Market trends and price developments | Metropolitan Region of Munich | Landsberg am Lech

Decisions based on facts - market trends and price developments

The question of where should I invest depends, among other things, on the expectations in the investment. In addition, the decision should always be based on forecasts based on sound market observations. Knowledge is the lead.

In principle, statements are made by the experts of the various interest groups and also by self-appointed experts. As a rule, one should not trust these statements as well as publications in various newspapers. However, the publications of the expert committees are a good basis. Regular reports are published by the expert committees of the big cities. For us Landsberger the report of the expert committee in Munich is important. In particular, because it has been shown time and again that the real estate market happening in our popular small town or district, strongly oriented to the tendencies of the state capital. Although at a much lower level and with a time lag, the trend is heading in the same direction. Therefore, I would like to present you the latest statements on market trends and price developments here (Source: Semi-Annual Report 2018 of the Expert Committee Munich):

After the record number of condominiums in the review panel has noted in the first half of 2018, a decline in the number of contracts and also the total cash turnover. However, the decline in cash turnover is not due to a fall in prices. Residential real estate was again priced higher, driven by continued high demand. It can therefore not always be spoken by the end of the boom in the housing market. After initial evaluations, the prices for condominiums have once again increased significantly. The market figures for residential land (developed and undeveloped) also declined year-on-year. With persistently high demand for residential real estate and rising prices, this can only be explained by a shortage of supply.

Price developments:

•     The prices for individual residential land (average and good residential areas) in the first half of 2018 are on average around 20% above the current land values ​​as at 31.12.2016
•     significant increase in the price of rental housing - average real estate interest rate around 1.8% (!!), income factor (multiple of annual gross profit) on average around 42 times (!!) - range 32 to 53 times; thus extremely low returns for rental housing
•     New apartment in average residential areas have risen since 2009 from € 3,400 / m² to € 7,500 / m² living space
•     New apartments in good residential areas have risen since 2009 from 4,000 € / m² to 8,200 € / m² living space
•     Existing apartments in average and good residential areas, have risen since 2009 from € 3,000 / m² to around € 7,000 / m² living space; It should be noted that I personally also significantly higher prices are known.
•     Price level of new semi-detached houses in average and good residential locations approx. 1.100.000 € -> 8.450 € / m² living space; Existing DHH 970,000 € / m² living space
•     Price level of new semi-detached houses in average and good residential locations approx. 1,025,000 €, -> 8,200 € / m² living space; Stock RMH 800,000 € / m² living space

Currently, the topic "are the high prices for residential real estate in our region stable or even higher" controversially discussed. I do not expect a reduction in residential property values ​​in our region in the medium term. However, no one can give you a reliable prognosis because forecasts remain subjective assessments, even if they are made by experts with mature expertise and data. However, if someone wants to give you the impression that he knows how the value of the property, or even worse the stock, develops, then you know: That is the wrong advisor. All the best for your investment decision. Your Christian Schaffner

Source: Landsberger Monatszeitung - October 2018