Property valuation Munich: How to determine the value of your residential property

A realistic valuation in advance is the key to a successful sale. Norbert Verbücheln, Managing Director of Mr. Lodge, also emphasizes the importance of the right asking price: "The right price should be found at the first attempt without having to reduce it later. Sellers often only realize afterwards that their desired price cannot be achieved on the market." With a well-founded property valuation right from the start, you can avoid such subsequent corrections. You create confidence among prospective buyers and increase the chance of achieving a fair market price quickly.

Tip:
Many owners underestimate the influence of small details on the property value. Lighting conditions, noise protection, energy efficiency or the condition of communal areas can have a direct impact on the purchase decision. An individual valuation by experienced experts takes precisely these subtleties into account.

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We know that property owners attach particular importance to confidentiality. With Mr. Lodge, your data and information are in safe hands:

• No disclosure of information: Your data will not be passed on to third parties.
• Data protection: We strictly adhere to the legal requirements and go above and beyond.
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Munich is one of the most sought-after real estate locations in Germany. With around 1.6 million inhabitants, the city is extremely popular as a place to work and live. For years, demand has significantly exceeded the supply of living space - a classic seller's market in which properties generally find buyers quickly. This imbalance has driven up purchase prices for a long time. For example, prices per square meter for condominiums in Munich have almost tripled since 2012 (from around €3,400 to around €9,200 per m² at the beginning of 2022). With average sales prices of around €7,000 to €13,000 per square meter, depending on the location, Munich is now one of the most expensive markets in Germany.

However, there have also been recent changes: A temporary peak was reached at the end of 2022, and prices fell again slightly for the first time in 2023. In the course of 2024, however, there were signs of a trend reversal - various market sources reported slight price increases, and official figures confirm a stabilization at the end of 2024. By spring 2025, the real estate market in Munich is already showing signs of recovery: buyer interest is picking up again, more sales are being made and prices are stable to slightly rising. This development underlines the fact that Munich remains a solid and future-proof address for real estate despite short-term corrections.
Nevertheless, sellers must remain cautious: The enormous demand is tempting some to call up moon prices that have little to do with reality. Excessive sales prices are often demanded that do not correspond to the actual market value of the property. It is also important to keep the buyer's perspective in mind: What can a prospective buyer currently afford in Munich? What financing is possible? Only a price in line with the market will lead to success - especially in a high-priced environment like Munich.

What determines how much your property is worth? The final sales price is determined by a variety of criteria. These factors play a role in particular:

• Location: The old estate agent adage "location, location, location" also applies in Munich. Macro-location (district, neighborhood) and micro-location (immediate surroundings, street location) have a significant influence on the value. A quiet residential area with good infrastructure, high recreational value and a sought-after neighborhood (e.g. Schwabing, Glockenbachviertel) increases the price, while a property on a noisy main street or in a peripheral location could achieve lower prices. The land value (standard land value) also plays a role here - a large plot in a prime location is particularly valuable for houses.
• Size and layout: Living space and number of rooms are obvious value factors. A well-designed floor plan is also important: Few connecting rooms, a large living area, bright rooms and possibly an additional study for a home office increase the attractiveness.
• Year of construction & condition: The age and renovation status of the property have a significant impact on the selling price. Modern, freshly renovated properties achieve higher prices per square meter than unrenovated old buildings with a repair backlog. Many residential buildings in Munich date from the 1960s and 70s, which makes modernization (e.g. windows, pipes, heating system, energy-efficient refurbishment in accordance with EnEV) all the more important. The energy status (thermal insulation, energy values in the certificate) is also coming more into focus.
• Equipment & extras: High-quality equipment can also increase the value. These include, for example, an upscale fitted kitchen, fine floor coverings, a modern bathroom, balcony or terrace, elevator in the building, underground parking space, garden area or an unobstructed view. Such features distinguish your property from the standard and allow a price premium over comparable properties without these extras.
• Use (rented or vacant): Whether the property is vacant or being sold with tenants has a major influence on the achievable price. Many buyers in Munich are looking for living space for their own use and are prepared to pay more for a vacant apartment. A rented apartment, on the other hand, is more likely to appeal to investors and is often valued as a capital investment at a discount. As a general rule, prices per square meter and comparative values usually refer to vacant properties - when renting out, it is the income that counts (see income capitalization approach) and the potential group of buyers is limited.
• Market situation: Last but not least, external circumstances determine the value. Interest rates, the economic situation and seasonality influence demand. In times of favorable interest rates and economic growth, higher prices can be achieved than in phases of high interest rates and uncertainty. Current trends (e.g. home office demand for extra workspace, value of balconies since corona) also play a role. In short, the timing of the sale can have an impact on the price.

All these factors mean that two apartments of the same size in Munich can achieve completely different prices. A blanket assessment along the lines of "X € per square meter" falls short. This is where the value of an individual property valuation, which takes into account all the special features of your property, comes into play.

Appraisers and estate agents use standardized methods to determine the market value of a property. In Germany, three valuation methods are generally recognized: the comparative value method, the capitalized earnings value method and the asset value method. Depending on the type of property and type of use, one or a combination of these methods is used:

• Comparative value method: Here, the value is derived from actual purchase prices achieved for comparable properties. In other words, sales prices of similar properties (same neighborhood, similar location, size, furnishings) are collected and the price of your property is derived from these comparative values. This method is mainly used for condominiums and terraced houses where sufficient comparative data is available. Standard land values for properties are also based on comparative prices.
• Income capitalization approach: This method is used if the property is intended for letting or as an investment (e.g. apartment buildings, rented apartments). The value is derived from the income that the property generates annually. The value of the building is calculated from the net rental income (less management costs) and a multiplier (capitalization rate) and the land value is added to this. Put simply, the capitalized earnings value reflects what an investor pays for the property in order to achieve a certain return.
• Asset value method: This method is often used for single-family homes or special properties for which there are hardly any comparable prices. The asset value is based on the construction costs: What would it cost to build the building from scratch today? Standard construction costs per m² (according to year of construction and type of building) are used and then reductions in value for age and wear and tear are deducted. The land value of the property is added to the building value determined in this way. Finally, a market adjustment is usually carried out in order to arrive at the value that can actually be achieved on the market from the purely calculated asset value.

In practice, a valuation is often carried out using a mix of these methods in order to obtain the most accurate result possible. As experienced real estate experts, we at Mr. Lodge know which method suits your type of property.

Tip: Make sure your property is presented in the best possible way. Professional home staging - i.e. arranging the rooms attractively with furniture, decoration and lighting - can significantly improve the first impression. An attractively presented property looks more appealing to prospective buyers and can often achieve a higher sales price.

In the age of digitalization, many websites entice users with a quick online property valuation. With just a few clicks and the entry of address, living space and year of construction, you are promptly shown an alleged market value. These online tools can be very helpful as an initial guide - they are usually based on the comparative value method and large collections of data. However, they are no substitute for an individual appraisal by a professional. The reason: no algorithm can recognize all the special features that determine the value of your property. Factors such as the specific micro-location (quiet rear apartment or noisy on the main street?), the quality of the furnishings, the state of maintenance or the orientation of the rooms are often not taken into account in purely data-based models.

Numerous providers on the internet provide valuations without ever having seen the property - but such purely statistical comparison methods are not ideal for the Munich market. Due to the high demand and the daily increase in land prices, automated tools are often unable to accurately reflect the actual market value. For example, particularly sought-after locations or unique features of your property may be undervalued. Conversely, positive market data can lead some sellers to have unrealistically high expectations. This is where the expert assessment comes into play:
An experienced real estate agent like Mr. Lodge personally inspects the property, knows the local characteristics and incorporates current market trends. Average prices per square meter from reports or portals only provide a rough guide - how much a specific property is really worth requires the experience of a long-standing market expert like Mr. Lodge. Apartments and houses are very individual; the professional estate agents at Mr. Lodge take all these subtleties into account, from the amount of sunlight and the floor plan to the condition of the neighborhood.

In this context, Norbert Verbücheln points out that exaggerating upwards is not good advice: "It makes no sense to set moon prices that cannot be realized on the market. The financial viability of the buyer must be taken into account. At Mr. Lodge, we always aim to find a price that is in line with the market." In other words, the objective view of an expert like Mr. Lodge protects sellers from being led by wishful thinking. A realistic valuation ensures that your property finds a suitable buyer quickly - and that you still achieve a fair market price.

As an established real estate agent in Munich (on the market for over 30 years), Mr. Lodge offers you an all-round service for a successful sale. It always starts with a free real estate valuation of your property. Our experienced real estate consultants know the Munich market inside out and carry out a thorough valuation. This gives you a realistic price estimate that takes into account current market data, comparative values and the special features of your property. Of course, we will accompany you all the way to the notary appointment and beyond to ensure a smooth sales process.

Mr. Lodge not only assists sellers with pricing, but also with making the most of the value of your property. This includes professional real estate photography for high-quality exposés and online appearances, the creation of virtual 360° tours and even free home staging if required. Such measures increase the attractiveness of your property and generate more demand - which is ultimately reflected in a better sales price. We also have an extensive buyer database, including international clients, so that your property can be offered to suitable prospective buyers.

In short: With Mr. Lodge, you have a reliable partner at your side who will accompany you competently from the initial consultation and valuation to the successful completion. You are welcome to use our online property price calculator on the website to obtain a rough estimate of the value in advance, or contact us directly for a personal consultation. Our team of experts will answer your questions and work with you to develop the optimal sales strategy for your property in Munich.