"Whether they were raped or not is part of the continuing investigation," Munich police spokesman Oliver Pimper told The Local.
"The two girls went with a group of people to the party after meeting them in the city centre on Thursday night. They were at the party for about two hours. During that time the two girls were held down, their clothes removed, and they were sexually assaulted."
It remained to be seen whether the group of eight teenagers, which included six boys and two other girls, all aged between 15 and 19, had planned the attack or whether it was something more spontaneous, he said.
The girls managed to escape their attackers and banged on the door of a neighbouring flat, where a woman called the police.
"The bell rang like crazy at about 3.45am. My husband and I were woken up, and we heard the hysterical voices of young girls over the security speaker. We went and looked straight away," the woman told regional paper the Münchner Merkur.
"Both were standing down at the entrance and were shaking in their whole bodies. They were crying heavily, were a total mess, and had very swollen eyes. They looked so bad I was frightened myself. I asked what was wrong, but they could hardly speak. Then the older one said just one word "raped". Then my knees went weak - she looked like just a child."
Pimper said seven of the group were arrested at the flat, while the eighth was arrested shortly afterwards elsewhere. Five of them were still being held in investigative custody on Wednesday.
It is understood the two girls did not need hospital treatment but are being given counselling.
"It is a shocking case, I have never dealt with anything like it," said Pimper. "I don't want to speak of a phenomenon, I hope it remains a unique case. I have never seen a case where young people deliberately take others and commit sexual crimes."