Why is it so hard to buy a flat in Munich?

157 posts in this topic

I moved to Munich in 1994 and as I had done in Scotland thought about buying a flat. First problem was finding a flat downtown since Schwabing seemed like a cool place to be and just like the west end of Glasgow where I had just sold up. Second problem was the dearth of available one bedroom flats up for sale since Munich, much like other parts of Germany, don't see a lot of people movement. Third problem was that the only flats available were for rent or advertised via a common thief also known as a makler in German ( TTwiki : a person that has time to spare and sits in someones house while they are at work and takes you around an apartment/house showing you all the things you kinda recognise eg., bog, kitchen, bedrooms etc. They then take a commission on any agreed rental price). Why pay a makler indeed. The last problem that I encountered was that out of all the available properties in Munich alone, the majority of them were already owned by rich German's trying to pull off a tax dodge by having a second home and renting it out - a'la Berlin when the wall went down. So the rich that already owned big houses in the Munich area bought properties (one/two bedroom flats in Munich) leaving literally not that much left in the nice parts of the city to realistically even think of buying. And even after that, when you went to the bank manager to enquire about a mortgage the first question was "how much do you plan to pay now in cash to secure a low interest rate" - 50 euro grand would have done nicely to get a rate for only 10 years maximum before re-negotiating with the bank again but sadly I was not in that earning or savings league. So it was a case of trawling the papers to see property for rent that didn't have a thief operating up front. Fortunately I found one in Schwabing and spent the next 8 years paying off someone else's mortgage but at least I had fun :angry: :lol:

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And the rent covers the interest payments, while the property appreciates. Works for me.

 

And we are by no means rich.

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What Rick said.

 

Financed a studio for 10 yrs. Renter makes the mortgage payments. After the 10 yrs. - income. No brainer.

 

At the time we bought it, there was nowhere to invest the money with such a guaranteed return.

 

Feeling of security knowing we will have a paid for bolthole should it be needed. Win win.

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Sounds like the OP has beer money and champagne tastes to me. Next question?

 

(and possibly a bag of oven-readies on the shoulders but we will glide over that for now)

 

Amusingly I just did the maths for the new builds in Central London that are in the News today. 1 Hyde Park is trading at £6000 per square foot.

 

That is £6,000,000 for 1000 square feet (90 square meters).

 

So for a top quality exclusive 90 square meters it would cost a cool €7.1M

 

Munich is a cheap shanty town compared :-)

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Did you know there is a possibility to get property at decend prices through forced sales at the Amtsgericht?

http://www.zwangsversteigerung.de/

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And the rent covers the interest payments, while the property appreciates. Works for me.

 

If the property appreciates. That is the big question. If it doesn't and requires repairs, or you can't rent it out, you're losing a lot of money.

 

 

Financed a studio for 10 yrs. Renter makes the mortgage payments. After the 10 yrs. - income. No brainer.

 

As above, definitely not a no brainer. It might have worked out for you, but it's no more or less a "no brainer" than investing in the stock market.

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If you buy smart (location, location, location) you have no problem renting out in Munich, and good location (especially in Munich) limits the chances of the property value going down.

 

There are tax advantages as well for buying and renting out, unlike buying to live in yourself (which I never understood).

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Prices may be edging up very slightly in Germany but not by much.

Munich figures will be a bit diferent though

http://www.globalpropertyguide.com/real-estate-house-prices/G

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Prices are going up at the same or slightly less than inflation Germany wide, so I wouldn't call that a great investment (but maybe not a bad one).

 

In any case, I'm not against people buying property. I'm against people thinking that they are somehow wasting money while renting and that buying is always the better financial option.

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I definitely agree with that.

 

Which is why we don't own our own place (to live in), as our rent is dirt cheap for Munich. Until recently, we were paying less than €1000 warm for 100 square meters. They just jacked up the rent almost 20%, but it is still very cheap for Munich standards, and we were paying just over 700 for years.

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It might have worked out for you, but it's no more or less a "no brainer" than investing in the stock market.

Have that covered. A bit doubtful a few years ago. Didn't sell anything and back in the black.

 

Diversity. Stocks, funds, real estate, cash.

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Define landlords = rich people with a very large expendable income or inherited wealth.

 

It's attitudes like that which mean it's hard to be a landlord. I'm one back home because I couldn't sell up for tax reasons. If the tenents don't pay the rent then I am very quickly in some serious financial shit. My last tenents thought I wouldn't notice that they hadn't paid the rent one month and thought the problem would just go away, like I was just some faceless rich person who wouldn't miss the money. We had to evict them cause of the parties they were having. Then after they ignored all forms of contact and we had to contact the parents who were the guarantors, one of them kicked up a fuss cause the hadn't got the deposit back. Seriously the wee cow went to the citizens advice bureau about it, needless to say I don't think she mentioned that she hadn't paid the goddam rent, daft bint. Anyways being a landlord ain'T all it's cracked up to be...rant over

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I think the point is that landlords are defined as people of high income in Germany. Something with which I agree.

 

This does not defacto translate to those in the UK where property was 'easier' to buy, and 'buy to let' was common and widespread amongst people of all social strata.

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It's a more common phenomenon in the US, but some landlords are themselves pretty highly leveraged as far as their rental properties go. Small landlords, i.e., people with at most a few of properties, are hardly plutocrats.

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I really don't think it's such a mystery that it would be difficult to buy a reasonably-priced flat in a city that is already completely built up, and where people want to live.

 

Boulder, Colorado has the same issue. The city has laws to prevent sprawl out onto the prairie, and is hemmed in by the mountains on one side. Nowhere to grow. Housing scarce and expensive.

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Good point, cinzia. While I understand the OP's frustration, maybe she is putting unneeded pressure on herself to have what family and, perhaps, friends have, an owner-occupied property of her own.

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