Real estate sales in Bavaria increased last year by eight billion euros compared to 2020 to a total of 72 billion euros. Ten years ago, the annual turnover was just under 34 billion euros. The city triangle of Munich, Augsburg and Ingolstadt, which the German Real Estate Association (IVD) has now examined in detail in a special report on the real estate market, contributes to a large extent to this development, which is so remarkable and also classified by many as worrying. “Thanks to their physical proximity and an excellently developed infrastructure, the three cities examined, Munich, Augsburg and Ingolstadt, are closely intertwined,” says Stephan Kippes, head of the IVD market research institute. While Munich and Augsburg have recorded strong price increases, Ingolstadt – also in a Bavarian comparison – has a special role.
“Augsburg has overtaken Ingolstadt,” says Kippes, which mainly has to do with the fact that Ingolstadt is heavily dependent on the Audi group. “The diesel crisis has had a greater impact on us,” says Elmar Zieglmeier from the IVD member company “Zieglmeier Immobilien”. The influx of skilled workers decreased, also because of the pandemic and Munich Airport, which was badly affected by Corona and is a job engine for Ingolstadt. At the same time, the city has initiated many construction projects for new apartments. “This is how we managed to defuse the market,” says Zieglmeier. “Anyone who is looking for an apartment on the rental market will also find an apartment of a good standard.”
The high price level in the state capital is a deterrent
Detached single-family houses with a good quality of life now cost 620,000 euros in Ingolstadt, Augsburg is around 770,000 euros and Munich around 2.1 million euros. Only the purchase price level in Ingolstadt has declined slightly in individual market segments in recent years, although slight price increases have been recorded again since spring 2021.
In Augsburg, on the other hand, the trend continues unabated. In the case of building land for apartment buildings, for example, the price increases in a ten-year comparison are 185 percent in Munich and 181 percent in Augsburg, with the Swabian metropolis coming from a lower level. Ingolstadt recorded an increase of 77 percent in this segment and in the same period. The deputy chairman of IVD Süd, Florian Schreck, describes Augsburg as a place of residence, especially for tenants and buyers, who are deterred by the high price level in the state capital. A square meter for condominiums in a good location in Munich costs EUR 9,000, while in Augsburg it costs less than half at EUR 4,200. Augsburg is even better connected to Munich than Ingolstadt, and prices are skyrocketing, especially in the towns along the railway line and the A8.
Long-established Augsburgers are being pushed out as a result of the influx
More than 10,000 commuters drive from Augsburg to Munich every day, and almost 3,000 from Ingolstadt. The Swabian metropolis in particular is suffering from the phenomenon that people from Munich are moving here because the price level is comparatively bearable for them, but locals can no longer afford their city can and will be displaced to the northern and western periphery. According to the IVD, the new building measures in Augsburg are far from sufficient to cover the demand.
While Zieglmeier expects further price increases for Ingolstadt in the next few years, Schreck and Kippes see no relaxation for Munich and Augsburg. According to the IVD, the corona pandemic has had a profound and lasting impact on the requirements for residential real estate. Apartments with a garden and balcony, as well as larger residential units overall, in order to also have space for the home office, have become much more popular. Since the desire for more living space in the urban area is expensive, prospective buyers are increasingly willing to accept a greater physical distance to their place of work when looking for a property.