Germany Property News

Rich overseas buyers turn to Munich prime property

Rich overseas buyers turn to Munich prime property
It’s not just wealthy Germans that are eyeing-up prime property in Munich – more international buyers are searching there, it is claimed.

The city, which has been favoured by wealthy Germans, is attracting more international buyers, says global agent Knight Frank.

Around 5% of buyers purchasing homes in Munich above ?2million are from abroad, led by those from Russia and the Middle East, latest estimates show.

They are attracted by Munich’s excellent medical facilities and services which are on a par with Harley Street in London, UK.

Kate Everett-Allen, from the International Residential Research department, explains, “Munich’s excellent hospital and medical facilities are on a par with London’s Harley Street and in recent years this has generated interest from many Middle Eastern buyers including Saudi, Kuwaiti and Qatari nationals.”

Prices last year rose 9.3%, outperforming most other European cities, according to its Munich Insight report, just published – and they could increase by another 10% this year, says Knight Frank.

Mainstream residential prices in Munich stand at around ?4,200 per square metre, which is among the most expensive in Germany, while luxury prices are closer to ?15,000 per square metre.

“Munich’s up-and-coming areas such as Nymphenburg have undergone significant regeneration in recent years and values in neighbouring Neuhausen are moving upwards, but older houses and villas in Pasing remain popular, too.

“We expect prime prices in the city to rise by further 5-10% in 2013 as supply tightens and demand increases due to Munich’s growing international appeal.”

Prices have increased in Munich with total sales volumes rising from ?9.3billion in 2011 to ?9.9billion in 2012. Quality properties are often being sold within two weeks of coming to the market, says Knight Frank.

Many international buyers are attracted to Munich’s historic quarter and use it as a base to explore the Bavarian Lakes.

Markus Riedel of Riedel Immobilien, a member of the Knight Frank network, says most buyers want to be within a 30-minute walk of the city centre in areas such as Altstadt-Lehel, Glockenbach, Schwabing and Maxvorstadt.

Since its housing market downturn in the late 1990s, Germany’s residential sector has outperformed most of its European neighbours.

The conservative lending policy of German banks – combined with the fact that only 45% of German households own their home – helped lessen the impact of the global credit crunch when it hit in 2008. As a result, post-Lehman mainstream property prices have risen by 7.4% in Germany, but fallen by 8% across the wider Eurozone.