Munich’s housing market remains one of Europe’s most expensive, with a well-kept resale apartment still costing about 7,750 euros per square meter and a new flat averaging 9,900 euros, even as the city’s development pipeline keeps shrinking.
Munich Housing Prices Stay High as Supply Shrinks
That matters because the city’s affordability problem is being driven less by demand easing than by a supply shortfall that policy has yet to fix. The latest analysis from Germany’s IVD property association says the much-touted “Bauturbo” has so far done little to speed construction, while higher borrowing costs and building expenses continue to stall projects.
The numbers underline how entrenched Munich’s price floor has become. A detached house now costs about 1.78 million euros, a semi-detached home 1.34 million euros and a terraced house just over 1 million euros. Resale apartment prices are still below their 2022 peak of 9,500 euros a square meter, but they remain far above the 2,500 euros seen in 2007.
The weakness is on the supply side. Munich added only 4,324 new homes last year, 36% below the average for 2010 to 2020, while the city still has more than 34,000 approved apartments that have not been completed. IVD researcher Stephan Kippes said developers are stuck with expensive land bought at prior cycle highs and face a cost base inflated by wages, energy and materials.
For investors, that keeps Bavaria’s largest city a split market. Owners and landlords benefit from chronic undersupply, but developers, builders and would-be buyers face thinner margins and little relief from policy. Adalytica’s Housing Fear & Greed Index now shows “Extreme Greed,” while awareness remains at “Extreme Fear,” reflecting hot pricing against scarce transaction visibility.
The broader implication is that Munich’s shortage is unlikely to be solved quickly by demographics or a gradual wave of babyboomer sales. That means affordability will stay strained, first-time buyers will keep needing unusually large down payments, and new supply will remain the key catalyst to watch heading into the next round of permit and completion data.
| Entity | Gains | Losses |
|---|---|---|
| Existing homeowners | ▲Higher asset values | ▼Little downside protection |
| Developers/bauträger | ▲Potential future demand | ▼High land and financing costs |
| Buyers/first-time buyers | ▲More time to save | ▼Euro-million prices |
| Munich renters | ▲Some hope for future supply | ▼Ongoing scarcity now |
