Rents in Germany's most densely populated city continue to rise despite the pandemic, a new study shows.
Residents in Munich now have to pay an average of €20 per square metre for a new-build flat, Stephan Kippes, head of market research at Immobilienverband Deutschland – IVD Süd, said on Thursday.
It means that people in Munich have to spend an average of 30 percent of their household income on housing costs.
However, the real estate association expects things to change soon, due to the trend towards 'home office' working and the current economic problems due to the pandemic.
Working from home allows people to live outside of big cities.
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“If I only have to go to Munich once a week, I have almost the rest of Bavaria at my disposal to live in,” explained Kippes.
This is a glimmer of hope for rural regions which have so far struggled to attract residents, while “Munich is boiling over”, said Kippes.
Rents in Bavaria up three per cent since spring
On average, rents for flats and houses in Bavaria have risen by three per cent since spring.
An existing flat in Munich costs €17.40 per square metre. In Augsburg, Nuremberg and Würzburg it's around €10, and it's slightly less in Ingolstadt, Fürth, Bayreuth, Bamberg and Schweinfurt.
Nationwide, the average price in large cities is €12.40 per square metre.
Rents in Ingolstadt are on the decline due to industry problems. “The main reason is the hiring freeze at Audi,” said IVD market researcher Michael Specht.
“The high-price segment has completely disappeared,” said Specht. In Nuremberg, too, tenants now have much more choice, he added.