Real estate prices: Munich is ten times as expensive

Wif he can only afford a small room in the big city, he could buy half a palace somewhere else. The price differences between the regions in Germany are sometimes that big, as a new analysis shows. In the city and district of Munich and in the district of Starnberg, the average purchase price for one- and two-family houses per square meter is almost 10,000 euros, around ten times as high as in the Kyffhäuser district and the Saale-Orla district in Thuringia and Mansfeld-Südharz in Saxony -Anhalt.

While living space is scarce in the metropolitan areas, rural areas still offer plenty of space. In addition to Thuringia and Saxony-Anhalt, average square meter prices of 850 euros to 1300 euros are also found in districts in Saarland, Brandenburg, Rhineland-Palatinate, Saxony, Hesse and Lower Saxony. According to the new data, it is usually cheaper to live in the country: 16 east German and four west German districts are among the regions with the 20 lowest real estate prices in the country. For this purpose, the brokerage company Von Poll Immobilien has processed the average asking prices for the purchase of single and two-family houses from the past year with data from Empirica-Regio and its own values ​​by region and has also done this for the rental of houses and apartments. The company wants to publish the analysis in the next few days, which is available to the FAZ in advance.

Interest rates, inflation and more

In the expensive regions of Munich and Starnberg, asking prices in 2022 rose by around 3 to 4 percent on average compared to the previous year. Overall, however, the situation on the real estate market in Germany has turned around after a decade of constantly rising prices. With the Russian attack on Ukraine, high inflation rates and an increase in construction interest rates to around 4 percent, new construction projects in particular are falling significantly, as is the number of transactions. This puts more pressure on existing rental apartments in metropolitan areas.

According to the brokerage firm, prices per square meter for residential property fell or stagnated in some regions for the first time in eleven years. Daniel Ritter, the company’s managing partner, expects the market situation to stabilize over the course of the year. “Prospective buyers have already started to recalculate due to the new price and interest rate situation,” he says. The desire for your own four walls remains high. He also cites the fact that rents will continue to rise in view of inflation and the housing shortage as a reason for this. Ritter calls home ownership a remedy for poverty in old age and argues that it is considered a safe asset class.

According to the broker evaluation, the average home ownership rate in Germany has remained almost the same, from 43.6 percent in 2014 to 44 percent in 2021, despite the desire to own a home. This puts Germany at the bottom of the list in Europe, as Ritter points out. Overall, little has changed in the proportion of property owners, but there are already changes in the regions. “Especially the eastern German districts and cities are visibly catching up, with increases of over 15 percent in some cases since 2005 – even if they are starting from a low level for historical reasons,” he says.

The ownership rate in Frankfurt an der Oder has developed the most, now at around 20 percent – ​​an increase of 26 percent between 2005 and 2021. It is followed by Schwerin and Cottbus. On the other hand, the rate is falling significantly in numerous western German regions, although the proportion here remains above the average.