So living in Munich is something you may be considering. Everything looks great on paper, salaries seem good, living standards are high and a lot is going on. Munich seems like one of the places you want to be living in if you want to see the world happening first hand.
However, relocating to Munich brings with it a challenge, with which many are faced only after making the decision or already making the last steps before coming here. Where to live in Munich?
You might have already heard that, but I can confirm, real estate in Munich is expensive. When I was first doing research in 2014, I was surprised at how high rent prices seemed to be for apartments, so I was thinking that maybe an even better option would be to just go ahead and buy an apartment and consider it an investment. Well I was in for a nasty surprise. Housing in Munich is insanely expensive, one could argue that, except for some elite locations in Germany, real estate in Munich is the most expensive in Germany. And rightfully so. If you already live in one of the world global hubs like Singapore, London, Paris, New York, San Francisco, then you will not be shocked at the prices, but for myself, coming from a capital of another EU country, I was surprised at the fact how high the prices were for (often) mediocre real estate.
For the last 10 years real estate prices in Munich have been on the rise and there is much more demand than there is supply. Even though you can see so many construction sites in Munich, the prices are rising substantially every year. This is of course due to the influx of new people moving to the city due to the rise of open positions to be filled, for which there is not enough supply in the local population, so companies are turning to the global markets for experts, the best paid jobs being mostly in the IT sector. Here is some general official statistics for the city of Munich. But be careful, what may be a good salary on paper, may diminish quickly if you are used to living in a normal sized apartment on your own. For high end jobs usually the employer will offer to set up housing for a certain period of time, after that you are on your own.
So, once you are here (or ideally before you arrive), you have three main options on how to live:
A shared accommodation (WG or Wohngemeinschaft) – so if you are younger or do not have problems sharing a flat or a house with others, then this might be your best option. Typically a WG will cost you anywhere between 500 and 800€ per month total, so it is one of the most affordable options for living.
The second option and also by far the hardest to come by is renting an apartment. Usually when an ad for an apartment is posted, people tend to receive a few hundred applications in the first few hours. You can use an agency or try to rent it on your own. Often competing for an apartment means you will have to convince the landlord that you are the best option (if you make it that far). That means providing your employment contract, credit history and basically making the landlord like you as much as possible. A typical rent for an apartment (heating costs, electricity and communal fee included) in Munich will set you back between 900€ for a tiny studio apartment and 2.300€ for a nicely furnished apartment of about 65m2 in one of the more posh and central areas of the city (i.e. Schwabing), prices have no upper limit of course, but an average 50m2 apartment will set you back somewhere between 1.200€ and 1.500€, if you will be lucky enough to be chosen. Most of the apartments are rented out empty with no furniture or equipment, kitchen and bathroom are of course installed. So you need to include the cost of furniture into your financial estimate. Moving companies do big business in Munich with the constant flow of people, so sometimes people also give away stuff or sell it really cheap when they move. If you are on the money-saving side you may profit from various give-away, just pick it up web pages and you will find a lot of good stuff cheap on ebay. Also when you move this is a great option to get rid of the stuff you do not want to take with you.
Renting a house – by far the best value for money, but also an expensive option. Houses are a lot easier to come by, since there is not that much demand for them and you can rent a house for about 1.800€ and up per month. Of course there is no upper limit here as well, depending on the location, furniture, estate, etc. A nice house will set you back between 2.200 to 3.300€.
If you are smart you can rent a few rooms out in the house, preferably to people who spend only little time in Munich (you have those as well), so you will mostly be on your own but can push the costs of the house to other people as WG and end up paying almost nothing if anything extra for your own accommodation.
Buying real estate – the final option if you plan to be here long and are a bit on the speculative side. There is a lot of talk of the Munich real estate bubble, but it has been growing for years. The price for a square meter might come as a shocker. The statistic is somewhere betweeen 7.500€ and up for a square meter. Typically you can consider that for something normal it will be 10k€ and up. From my experience a central apartment near Marienplatz, owned by a young millionaire has 200 square meters with a terrace and is worth about 25k€ per square meter – so totalling 5 million EUR.
Rent contracts usually have a three month up-front security payment for events of damages or unpaid rent and a three month termination period. If you are looking to rent for less than one year, that will make you less desirable in the eyes of landlords. Also, expect that rent contracts are done in advance, which means you might need to wait for a month or two to move in after you find a place.
You can also check many Facebook groups where you can also sub-rent an apartment when somebody goes abroad for a few months, you can get an apartment for a shorter period of time, this is of course only a temporary option before you get settled and know your way around if you plan to stick around Munich for a longer period of time.
Here are a few that might come in handy, get your google translate ready if you do not yet write and understand German:
Not so long ago the prices of real estate in smaller cities or suburban areas were substantially cheaper but in the last year or two, they have gone up and now rent out only a little bit cheaper than the city area, usually when you add the amount of time you will need to spend travelling to and from work and the (public transport or gas) costs, it makes more sense to look for something in the city.
So the real estate market is tough, sometimes there are cases when people bribe the real estate agents to get selected for the apartment, even though that is illegal, what you can expect to give out (especially if you really really like the place) is somewhere between 2.000 and 4.000€. In cold, hard cash of course.
When I was driving home from work yesterday, there was an interesting political speech about how people from Munich have enough of being intimidated by rising real estate prices due to speculative investors buying up properties. The sad fact is that if you are somewhere in the middle-class income segment, you can forget about buying real estate. Especially if you do not have credit history in Germany and a really good job. Making between 4.000 to 7.000 Gross monthly income and unmarried will net you somewhere between 2.400 and 3.900€ per month. So you can do the math on your own. You can play with numbers here.
So the city is growing and population is growing fast as well. Infrastructure and real-estate investments are unable to keep up with the demand at the moment. Unemployment is extremely low, some estimates even set it at about 1.5% for the city itself.
Many of the original Munich inhabitants have already moved out of the city and decided to rent out their real estate. You also have cases where people have really low rents due to the fact that the city provided long-term rent guarantees to people in the 80´s and I think also the 90´s in order to attract people to the city. Many of these people signed contracts for several decades and still have low rents of a few hundred EUR. They often sub-let their apartments to newcomers and relocate somewhere else.
There is, however, a great trick if you have a place in Munich, that can make you a substantial amount of money. Often people use that option – Oktoberfest. During that time many people rent-out their apartments via Airbnb to the massive number of tourists coming to visit the city. They use the money to take a vacation and when they come back, they still bag a nice profit. A nice example was a friend of mine, he sub-rented his apartment to 6 guys coming for two weeks for 11k€, went on vacation with his girlfriend, spent about 4k€, he was left with a nice 7k€ profit that he pocketed. If you have a house at your disposal, that might be a nice option. Usually people spend most of the time on Oktoberfest and by the time they come home they just fall asleep.
There, I hope this posts helps you understand the real estate situation in Munich a bit better and gives you an idea what to expect on the real-estate market. Good luck with finding a nice, cosy place to stay that will help you miss home less when you relocate to Munich.