The market for apartment buildings in Munich 2025: current developments and outlook

After a period of uncertainty, Munich's market for apartment buildings is once again showing positive signals. Rising prices and heightened investor activity define the current picture. A look at the latest market data tells a clear story: the recovery has begun, and a cautious optimism is returning.

Current market data: a steady upward trend

The German real estate investment market got off to a positive start in 2025, reaching a transaction volume of 7.9 billion euros in the first quarter. For apartment buildings in Munich, an average of 6,598 €/sqm (for 3–6 residential units) and 6,189 €/sqm (for more than 6 units) was paid in the first quarter of 2025. This represents a price increase of around 2.3 % compared with the same period of the previous year.

The income multiplier — that is, the multiple of the annual net cold rent — currently stands at roughly 30, while the average property interest rate is given as 2.8 %. In the apartment-building segment in particular, family offices and private investors are already highly active once again, providing stable demand.

Valuing apartment buildings: the income approach

Apartment buildings are generally traded as capital investments, which is why their valuation is based on the potential yield. The standard method is the income approach. Its foundation is the gross income achievable at prevailing market rates. From this, the non-apportionable costs are deducted (management, maintenance, an allowance for rental loss). The resulting net income must offer the buyer a market-standard return. In Munich, these yields range from around 2.5 % to 3.5 %, depending on location, building type and condition.

Example: an apartment building generates 250,000 € in rent per year. After deducting non-apportionable incidental costs of 10 %, a net income of 225,000 € remains. At a target yield of 3.0 %, this results in a property value of 7.5 million €.

Which factors influence the value?

• Location within Munich (central locations achieve higher multipliers)
• Structural condition and degree of modernisation
• The building's energy quality
• Rent structure and potential for rent increases
• Commercial share and any remaining development rights
• Divisibility into condominium units (note the prohibition on division under the Building Land Mobilisation Act and conservation-statute areas)
• Particularly valuable listed buildings with a unique character

The sales process: from value to a successful transaction

Selling an apartment building in Munich requires careful planning and expertise. Among the documents relevant to the valuation — and regularly requested by prospective buyers — are:

• A current land register extract and floor plans of all units
• A digital building file including all available documents
• Current tenancy agreements together with any amendments, rent increases and deposits
• Service-charge statements for the past 2–3 years
• A list of renovation measures (in particular the roof, heating and pipework)
• Energy performance certificate and proof of insurance

Viewings: expertise is expected here

Since most buyers of an apartment building are highly knowledgeable in the field, they expect an experienced specialist. It is important to treat the tenants sensitively and considerately — a change of ownership should not provoke anxiety. A sensible strategy is to begin by showing communal areas such as the cellar, stairwell and garden; further apartments only once there is concrete buying interest.

Negotiations and the purchase contract: more than just the price

Beyond the purchase price, many aspects need to be settled: the condition and timing of the handover, payment of the purchase price, from when the rental income accrues to the buyer, as well as the seller's warranties. All of this is governed by the purchase contract, which is drawn up by an experienced notary.

Outlook: market development 2025–2026

The limited availability of properties, especially in prime locations, will continue to support prices. Lainer & v. Anhalt Immobilien GmbH has extensive experience in the Munich market for apartment buildings and offers owners a well-founded valuation as well as a tailored sales strategy. What sets us apart is our close ties to many entrepreneurs and industrialists who finance predominantly with equity — which ensures a swift transaction speed.