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Buying an Apartment in Munich, Germany: Guide

a view of different housing in Munich.

Many people dream of owning their own apartment in beautiful Bavaria, and its capital Munich, in particular. However, it’s the wealthiest place in Germany; hence, property prices are among the highest in the country. Not everyone can afford to buy a home in this area.

Despite high prices, buying an apartment in Munich is still a good investment. Moreover, foreigners can get a mortgage under good conditions. The average apartment price in the Bavarian capital is €9,362 per square meter. The cheapest apartments go for 7,521 €/m².

So are you considering buying an apartment in Munich and don’t know where to start? In this article, we explain the real estate purchasing process in Germany and current home prices in Munich, among other helpful information.

Read our guide on how to buy a home or apartment in Germany.

Buying a property in Munich

Munich’s real estate market is pretty competitive; there are only a few vacant properties to choose from. Consequently, you will be limited in options. Moreover, supply shortages will likely drive property prices upwards in the coming years.

Must read before moving to Munich: Pros and cons of living in Munich.

Is it worth buying an apartment in Munich?

The fact is that apartment prices rise more rapidly than rents in Munich. The achievable yields per year are well below 4%.

Nonetheless, real estate will continue to yield significantly higher returns in the medium term than fixed-income investments. Hence, buying an apartment brings better results than investing in the stock market.

For investors, this means that buying a property as an investment increases in value. You will gain the profit on a subsequent sale plus generate a rental income in the meantime.

Furthermore, despite the high home prices in the Bavarian capital, Munich is still cheaper than other large European cities like London or Paris.

Income you need to buy a home in Bavaria

How much money do you need to earn to buy a home in Munich? The study has calculated how many annual incomes buyers pay for a 111-square meter flat. It came to 5.6 annual net household incomes nationwide. The study separates apartments in cities and single-family homes in the countryside.

In cities, you will need 7.8 annual household net incomes on average. In Munich, the property will cost you 13.3 annual incomes, on average.

In contrast, somewhere in the countryside close to Munich, you can buy a house for a 4.5 annual net incomes. For example, the price would be 9.4 yearly incomes in the Starnberg area. And near Erding, it’s only 6.2.

Property prices in Munich

apartment buildings in Munich

For most people, home prices in Munich are shockingly high. The average price per square meter for an apartment in Munich is €8,986. However, in the second quarter of 2022, this number is averaging about 9,362 €/m2. Besides, property prices for apartments in Munich have been rising very rapidly.

In the graphic below, you can see apartment prices in Munich as of September 2022.

a map of places in Munich
Source: www.immowelt.de

The dark red color means purchasing price of €13,250 per square meter. The green color means €7,800 per square meter. The most expensive parts of the city are Maxvorstadt, Isarvorstadt, and Ludwigsvorstadt.

Houses cost less than apartments but have been rising too. Compared to the third quarter of 2020, they are 11% more expensive than last year.

Property typeMedian price
Apartments8,704 €/m²
Houses6,410 €/m²

Generally, you can find an apartment priced anything from 6,000 €/m² to 10,000 €/m² in Munich. Moreover, a single-family home will cost you as much as €1.1 million.

The average apartment size in Germany is 91 m² across the country. Therefore, the average home will cost 278,915 EUR. In Munich, on the other hand, such an apartment will have a price of 858,039 EUR.

For example, a 30 m² apartment costs 9,861.53 €/m² on average. A 60 m² apartment is currently priced at 9,588 €/m. The average purchase price for a 100 m² residential property in Munich is 10,071 €/m².

The cheapest apartments are located in the district called Hasenbergl for 7,521 €/m².

30 m²€9.861€6.918€5.169
60 m²€9.588€6.253€4.422
100 m²€10.071€6.420€4.863
Source: www.wohnungsboerse.net

Here is the price development from 2018 to 2021 for the same apartment types:

30 m²
60 m²
2021€8.471,46 €4.900,27€3.865,27
100 m²

Prices for an average new built 80 square meter apartment in different city districts of Munich:

LocationPrice per m2 (€)Average offering price in 2021 (€)Change from 2020
Am Hart8.983718.6383%
Forstenried8.922713.741 3%
Berg am Laim8.916713.2914%
Source: www.immobilienscout24.de

Read our guide on house prices in Germany.

Rent prices

In the second quarter of 2021, Munich’s average rent per square meter was €21.26 for new buildings. The rent price for existing properties was €18.87 per square meter. Compare it to Berlin, where rent is about €15.37/m2. Across Bavaria, rent costs about €19.64/m2.

Other expenses

Furthermore, purchasing a home in Germany will cost you more than just the initial house price. Here are other additional costs buyers should expect. They could add up to around 14% of the purchase price.

  • real estate agent commission (if applicable)
  • notary and registry costs
  • land transfer tax (if applicable)
  • property tax
  • ongoing maintenance costs

Home purchasing process in Germany

The main steps in buying a property in Germany and Munich are:

  1. Search for a suitable apartment or house.
  2. Make an offer on the property that you like.
  3. Check the quality of the apartment and renovations that were done or have to be done.
  4. Calculate all additional costs, plan and find financing.
  5. Arrange a notary appointment.
  6. Sign the contract.
  7. Pay the taxes.
  8. Request a mortgage payment from the bank.
  9. Transfer down payment to the bank.
  10. Transfer the money to the seller.
  11. You will be registered as a new owner in a land registry.

Many people decide to buy a home with the help of a real estate agent. Additionally, you might want to work with a tax consultant to assist you with financing and tax issues related to buying property in Germany.

Some of the necessary steps in the apartment buying prozess include:

1. Visit the notary

Once you and the seller agree on all terms, you should schedule an appointment with a notary. You will need their services for several things, including signing the purchase agreement. In Germany, you can’t buy a property without a notary.

2. Purchasing contract and land registry

The notary conducts the draft of the purchase agreement for you and the seller. You will have time to review it before signing. Once all parties have signed the contract, you, as a new owner, will be entered into the land register.

3. Payment

After signing the contract, you will have to pay the taxes and the brokerage fees first if you worked with one. If you bought an apartment with the help of platforms like Loanlink24 and Hypofriend, there are additional fees due.

Afterward, buyers receive a request for payment two to four weeks after signing the purchase contract. They forward it to their bank, along with other documents, like a confirmation of paid taxes. They also must transfer the deposit to the bank.

Consequently, you can transfer money to the seller.

Lastly, you will be noted in the land register as a new owner and get your keys.

See more on purchasing process in this guide.

Expenses to consider

1. Real estate agent

If a real estate agent has brokered the apartment, they will charge a commission after the successful purchase. Agent’s fees can be up to 3.57% of the property price. The buyer and seller share the costs equally.

2. Taxes

A buyer pays a property transfer tax (Grundwerbsteuer), which is about 6%. Payment of real estate transfer tax is required to transfer the ownership from one party to another.

3. Notary and registry costs

Services of a notary usually cost about 1-2% of the property price. Plus, you pay for the registration of the apartment in the land register (Grundbucheintrag), which is about 0,5%.

4. Ongoing costs

In addition to the fixed costs, buyers should consider other possible expenses that can arise in the future. For example, if the apartment needs to be renovated, you will spend a significant amount of money.

Also, don’t forget that the repayment of the mortgage starts immediately. Hence, you must calculate it in your monthly spendings.

Mortgages in Germany

Fortunately, foreigners are eligible for mortgages and loans in Germany. For this, you will need to have a German residence permit and a stable income source.

Today, banks also lend money to buyers who are non-residents; however, the maximum amount of loan can be up to 50% of the property price.

Generally, banks prefer not to lend to people over 65 years and no more than 40% of their household income.

For example, if you earn €3,600 after taxes, you can get a loan for €1,440/month. Then multiply it by the number of months and years you want to take a loan for, and you will get the approximate loan amount.

When applying for a mortgage with brokerage platforms like Hypofriend or Loanlink24, they will do the main work for you and pick the best loan option. After you get the best offer from the bank, the broker will submit the request to the bank.

The bank will check your creditworthiness, income, and SCHUFA score and eventually approve the loan.

Interest rates

Banks offer different interest rates based on risk. Interest rates in Germany are among the lowest in Europe. You might even receive a rate of as low as 0.8%. You will also deposit at least 20% of the purchase price as a downpayment.

Additional costs of buying real estate must also be paid by the buyer and not with a loan (between 5.5% – 9.5% of the property value).

Getting a mortgage offer with the broker

The commission of the bank clerk is higher than of independent brokers. Therefore, choosing a mortgage with a broker like Hypofriend will save you money and time. Offers provided directly from banks are more expensive due to the commission of the bank’s consultant.

Mortgage brokers will find the best loan for your circumstances and submit the request to the bank. Additionally, brokers provide comprehensive advisory and consultation, which you won’t receive at the bank. The entire process with Hypofriend and Loanlink24 is digital.

What do you get by working with Loanlink24?

  1. It estimates the maximum loan amount a German bank will lend you. 
  2. If you don’t have a German bank account, they open it for you (a bank account is required for the loan).
  3. You will get pre-approval for your mortgage.
  4. You can see and compare financing options from more than 400 German banks.
  5. Once selected, you can apply for financing on their platform.

You can complete the entire process of mortgage finding, application, and receiving via Loanlink24. Besides, they speak English, so all procedures can be completed without knowing a German word.

Loanlink24 is rated 10 out of 10 by 98% of customers. Read it here.

Besides, the largest home financing company Interhyp offers financing options for individuals who plan to buy or build a house in Germany.

Where to look for an apartment in Munich?

The best online platforms to find apartments and homes in Germany and Munich are:

After buying a home in Germany, you can rent or sell it out by using the same websites. Yet, with ohne-makler.de, you can do it all at once. 

Renting vs buying in Munich

What is better to rent or to buy in Munich? Due to the high real estate prices, most people living in Munich rent apartments instead of buying. The main problem is that you need to have enough savings for a down payment, which is 20% of the property price.

Moreover, in addition to the purchase price, buyers must pay taxes and fees, which make up around 14% of the purchasing costs. These numbers are higher than in many other countries.

According to a recent study, 90% of German residents who rent instead of owning have less than 50,000 EUR in assets.

For instance, in January 2021, the amount of Germans living in their own homes was the lowest since 1993. Only 42% of residents own property in Germany.

Berlin has the lowest rate: only 14,2% of residents own a home there. In Saarland, on the other hand, the homeownership rate is 62,6% – the highest in Germany.

Generally, people in large German cities don’t own property; almost everyone rents a place to live. So what better to buy or rent depends on your financial situation and willingness to take and pay a loan for at least 20-30 years.

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