Market value Munich - real estate valuation explained simply

1 What is the market value of a property?

---

The market value of a property is defined by law (§ 194 BauGB) as the most likely purchase price that can be achieved under normal circumstances on the valuation date. In simple terms, the market value corresponds to the current market price that an objective buyer would pay if the price were freely determined. This value serves as a guide for sellers and buyers to determine a fair property price .

In practice, however, the market value is often a question of perspective and not the value that is ultimately achieved on the market. It is particularly important in the following situations: when selling a property (to determine an appropriate offer price), during purchase negotiations (as a guideline for buyers so as not to overpay) and in the case of inheritance or divorce (for the division of assets and for tax purposes). Important to know: Market value and fair market value are usually used interchangeably. Banks, on the other hand, often work with the more conservative mortgage lending value (collateral value), which is slightly lower than the market value in order to cover their credit risk. For private sellers and buyers, however, the market value remains the decisive parameter.

"A realistic assessment of the market value is the key to a successful property sale," explains Norbert Verbücheln, Managing Director of Mr. Lodge. "Only those who know the exact market value of their property can set the optimum selling price and negotiate successfully."

2 The real estate market in Munich: Special features and prices

---

Munich has been one of the most dynamic and expensive real estate markets in Germany for years. The Bavarian capital is experiencing steady population growth, a strong economy and limited availability of building plots. These factors lead to a short supply and high demand, which keeps real estate prices at a high level. Supply and demand determine the market in Munich to a large extent - sought-after locations close to the city center regularly achieve top prices, while even in peripheral locations, prices are above average compared to the rest of Germany.

Current market data (as at 2025) shows average purchase prices of around €9,000 per m² for condominiums and around €8,400 per m² for houses in Munich - values that are well above the national average. In sought-after districts such as Altstadt-Lehel, Maxvorstadt or Schwabing, prices often even exceed €10,000 per m². By comparison, prices per square meter in suburban areas such as Trudering or Pasing tend to be between €7,000 and €8,000. Despite a slight cooling of the market in 2022-2024 due to higher interest rates, property values in Munich have now stabilized. Although prices in 2025 will be around 10-20% below the historical peak, they will remain at a historically high level. Munich therefore remains a seller's market in which real estate represents an extremely stable investment.

Tip: Online property calculators can provide an initial rough estimate of the market value, but are no substitute for an individual valuation. The special features of your property - from the micro-location to the fixtures and fittings to current market trends - can often only be shown in general terms online. Use such tools (e.g. the property price calculator from Mr. Lodge) as a guide, but rely on a detailed appraisal by an expert for the final sales price. This will help you avoid misjudgements that could prove expensive later on.

3. factors that influence the market value

---

The market value of a property is determined by numerous factors. Some of the most important factors are

• Location: It is not without reason that location is considered a decisive value factor. In Munich, location makes a huge difference: properties in sought-after districts (e.g. with a central location, good infrastructure, public transport links and nearby schools/shopping facilities) achieve significantly higher values than properties in less sought-after areas. The micro-location (e.g. quiet residential street vs. main road) also influences the price. Popular districts with a high quality of life and image - such as Schwabing, Haidhausen or the Glockenbachviertel - have correspondingly high market values.
• Property condition and fittings: The structural condition of a property has a major influence on its value. A well-maintained or freshly renovated apartment is valued higher than a property in need of refurbishment with a renovation backlog. Modern fittings and attractive design (e.g. new bathrooms, high-quality kitchen, underfloor heating) increase the market value. Energy efficiency is also playing an increasingly important role: well-insulated houses, new windows or a modern heating system (keyword: energy performance certificate) lead to a higher market value. On the other hand, defects such as moisture damage, outdated technology or a missing balcony can reduce the value.
• Size and layout: The living space and number of rooms are of course fundamental - larger apartments or houses have a higher value in absolute terms. But the floor plan also counts: An optimally laid out 3-room apartment with no through rooms is often worth more per square meter than a comparably sized apartment with an unfavorable layout. In the case of houses, the size of the plot also comes into play: a larger plot (with a garden, for example) increases the market value, especially in Munich, where land is scarce and expensive.
• Year of construction and modernization: The year of construction can indirectly say something about the condition. However, modernization measures are more important: an old building with new heating, new pipes and a completely renovated interior can be more valuable than a younger house without renovations. Listed old buildings in prime locations in Munich often achieve collector's prices, while standard buildings from the 1960s without renovations sometimes have to accept discounts.
• Market situation and economic factors: The real estate market is influenced by supply and demand as well as the general economic situation. In times of high demand and scarce supply - as has long been the case in Munich - market values tend to rise. Interest rate trends play a role here: low interest rates increase the demand to buy, while rising interest rates mean that fewer people can afford a property. The rise in interest rates in 2022/2023 led to a slight cooling of the market - prices fell slightly until buyers and sellers found each other again. The economy and labor market also have an influence: Munich, with its robust economy, usually only experiences moderate corrections even during downturns.
• Special value-influencing circumstances: There are also factors that can specifically influence the value. These include the standard land value (average land price for the location published by the Munich Expert Committee), existing rights and encumbrances in the land register (e.g. rights of way, residential rights can reduce the value), or upcoming project developments in the neighborhood (e.g. planned infrastructure projects that could increase the value of the location). Normally, however, such factors are already taken into account in market pricing, provided they are generally known.

4. methods of determining market value

---

To determine the market value professionally, there are standardized procedures in Germany that are regulated in the Real Estate Valuation Ordinance (ImmoWertV). Depending on the type of property and available data, the following methods are usually used:

• Comparative value method: Here, the value of a property is derived from comparable sales. This means that recently achieved purchase prices of similar properties in similar locations are used. This method is often used for condominiums or standardized single-family homes where sufficient comparative data is available. Example: If three similar apartments have recently been sold in the neighborhood for around €800,000, this allows conclusions to be drawn about the market value of your own apartment. The prerequisite is a transparent market - in Munich there is a good data basis for comparisons thanks to the expert committee and market reports.
• Income capitalization method: This method is preferably used for rented properties or apartment buildings (multi-family houses, investment properties). The market value is derived from the expected income (rental income). In simple terms, an appraiser sets the sustainable annual net rent in relation to an appropriate property interest rate (return on capital). The land value is also taken into account. The income capitalization approach thus reflects the value from an investor's perspective - relevant in a city like Munich, where many properties are purchased as capital investments.
• Material value method: If there is hardly any comparative data (e.g. for unique properties or special commercial properties) and the income component does not play a major role (e.g. owner-occupied home), the asset value method is often used. Here, the value of the property is determined from the production costs less depreciation, plus the land value. In other words, you calculate what it would cost to rebuild the building today (taking into account age and wear and tear) plus the value of the land. In Munich, this method often leads to realistic results due to the extremely high land values - especially if, for example, there are hardly any comparable prices for an old existing property.

In practice, appraisers and experienced real estate agents often combine several methods to determine the market value as accurately as possible. Market data (e.g. current asking prices, standard land values, rent index) and the expert's experience are also taken into account. A local specialist knows, for example, the price differences within Munich districts or value-enhancing details that an automated calculation does not recognize. This is why local expertise is so important.

5. market value vs. sales price - why a realistic valuation is important

---

"It is tempting for owners who want to sell to set the highest possible price. But caution is advised here," emphasizes Norbert Verbücheln: "Ideally, the market value and the actual selling price should be close to each other. The market value already represents the fair market price - if the asking price is significantly higher, sellers risk the property remaining on the market for a longer period of time and potential buyers being put off. An exaggerated offer price often leads to a sale at a lower price than would originally have been possible under time pressure. Conversely , a price that is too low means that you are leaving money on the table."

A professional valuation helps to prevent these pitfalls: it ensures a realistic assessment of the market value so that you neither sell below value nor lose buyers due to an inflated price. Especially in Munich, where price expectations sometimes diverge (some owners are guided by top prices in the media, while buyers hope for bargains), the market value brings all parties down to earth.

In addition to the selling time, the right price also influences the negotiating position. If the seller knows the well-founded market value, he can enter into price negotiations with confidence and reject unrealistic offers. Buyers, on the other hand, are more willing to accept a fair offer close to the market value if the valuation is communicated transparently. When it comes to financing, banks also make sure that the purchase price matches the market value - otherwise there may be gaps in financing if the bank bases the loan on a lower mortgage lending value.
In short: the market value and sales price should match as closely as possible. An upward deviation can only be successfully enforced if there are very special circumstances (e.g. collector's value, bidding war in the case of exceptional rarity). In all other cases, a price in line with the market facilitates a quick and smooth sale.

Note: The market value is always linked to a specific cut-off date - for example, the date of the valuation, the purchase decision or the divorce. The value of a property can therefore change within a few months, for example due to market movements, changes in interest rates or construction work. Anyone who is dependent on current figures - e.g. for sales negotiations or a statement of assets - should always have a revaluation carried out promptly.

6. professional support with the valuation

---

Determining the market value is complex - but you are not alone. It's a good idea to enlist the help of an expert like Mr. Lodge, especially if you're planning to sell your property. A local estate agent like Mr. Lodge or certified surveyor can provide an informed valuation and guide you through the process.

Mr. Lodge, for example, as one of the leading real estate companies in Munich, offers owners a comprehensive valuation service. This service is free and non-binding for you and comprises several stages: First, an online calculation can provide an initial guideline value, followed by an individual consultation via video call or telephone with experienced real estate experts. Finally, there is the option of an on-site inspection, during which all the special features of your property are recorded. At the end, you will receive a professional valuation from Mr. Lodge, including an estimate of the optimum asking price - discreet, transparent and tailored to your situation.

"When it comes to property valuations, don't rely on chance, but on the experience of professionals," advises Norbert Verbücheln. "Our estate agents have been familiar with the Munich market for many years. We support owners from the initial valuation to the successful sale - competently and confidentially."

The advantages of such a professional valuation are obvious: you save time and effort, receive an objective assessment without an emotionally biased view and avoid the risk of entering the market with the wrong price. A good estate agent will also give you tips on the sales strategy (e.g. on optimum timing or necessary preparatory steps) and, if you wish, take over the entire marketing process.
In the end, a thorough market value assessment pays off - in the form of a quicker sale and optimal sales proceeds. Especially in the demanding Munich market, you should therefore make use of the expertise of experienced real estate partners such as Mr. Lodge.

7. conclusion

---

Knowing the market value of a property in Munich creates security and orientation - for both sellers and buyers. It reflects the realistic market price that can be achieved under normal conditions and is based on a variety of factors ranging from location to fixtures and fittings. As a sought-after location, Munich is characterized by particularly high property values, which is why a realistic valuation is all the more important.

It is crucial for owners to have the market value determined professionally before setting the sales price. This ensures that they neither sell below value nor scare off potential buyers with an inflated price. In turn, prospective buyers can use the market value as a guide to make a fair offer and adjust their financing accordingly.

In conclusion, real estate valuation is a matter of trust. If necessary, consult an expert such as Mr. Lodge to accurately determine the market value of your property. With this knowledge, you are ideally equipped to operate successfully on the Munich real estate market. After all, a well-founded valuation is the foundation for every good decision regarding your property.