In recent years, the real estate market in the region has been like driving on a well-developed motorway: things have been going well and at full throttle. According to the latest figures, it is still doing so, although there is currently a bit of a fog. And whether the autobahn continues behind the bank of fog, or whether you can suddenly only drive at country road speed or maybe also at dirt road speed, seems to be an open question. There are first signs of the latter – and they are already showing up in the district.
For a long time it was considered that the concrete gold is simply becoming more and more golden, i.e. it experiences a constant increase in value. But the fact is that there are no speculative profits that can be completely decoupled from the real economy: at some point both will have to be synchronized again. In the case of a listed company, this point is reached when the proceeds from the sale of new shares can no longer meet the return requirements of the old shareholders and at the same time the company’s business model does not generate enough profits to compensate for this – keyword: Wirecard.
In the case of concrete gold, this effect occurs – albeit much milder – when the purchase price of apartments can no longer be amortized within reasonable periods of time. Which is important, because in Bavaria only a little more than 50 percent of people live in a property that they own – in the greater Munich area it is likely to be significantly less. Which means that the rest of all apartments should not bring a roof over their owners’ heads, but should bring income. An income that is tied to the financial ability of the consumer. Although they have spent an increasing proportion of their income on rent in recent years, this cannot be increased indefinitely. Just as little as the proportion of high and higher earners who are then supposed to take over those apartments that can no longer be paid for with average income.
The fact that rents in the district rose only slowly as a result is of course good news for tenants. At least for those who already have an apartment. But the actual problem that there are too few apartments, also and especially in the immigration district of Ebersberg, will not change as a result. And if yield-driven investors don’t find the business model lucrative enough, perhaps even fewer new buildings will be built. Which is why it is even more urgent that cooperatives and other non-profit housing companies are strengthened – regardless of whether real estate prices are developing at the speed of the motorway or dirt roads.