Update on the Munich Market for Apartment Buildings
As of August 2025
Interest Rates for Apartment Buildings in Munich
Buyers of apartment buildings focus their search specifically on the best possible yield prospects. Yields (or interest rates) are therefore the decisive metric by which the price development of apartment buildings can be read. They indicate the ratio between rental income and purchase price. Munich's committee of valuation experts (Gutachterausschuss) regularly publishes the so-called property yield rates (Liegenschaftszinssätze) in its annual report.
Developments in recent years clearly show that property prices in this segment are strongly dependent on financing rates.
Since the beginning of the war in Ukraine, international developments (Germany's economic weakness, the Trump administration in the US at the time) have led to a higher risk assessment for Germany as a business location.
After a long period of negative interest rates, German government bonds came under significant pressure, and yields rose to 2.0% within a few months. With some delay, but likewise driven by Russia's war of aggression, inflation rose sharply.
The lending banks reacted as expected: higher capital market rates, combined with a higher risk assessment, caused standard 10-year financing rates to rise from approx. 1.0% to a corridor of 3 to 4%. This corresponds to a fourfold increase in interest rates within one year.
The resulting rise in investors' yield expectations hits the apartment building segment particularly hard. Accordingly, portfolio holders have been cautious in their investments in recent years. The introduction of the de facto conversion ban under the Building Land Mobilisation Act (Baulandmobilisierungsgesetz) further aggravated the situation, as in many cases it removes the option of further developing existing buildings. These buyers are now absent from the market.
How to Successfully Sell Your Apartment Building in Munich
Selling an apartment building in Munich involves numerous considerations. On the one hand, the aim is to achieve the most attractive sale price possible; on the other, reputable buyers are decisive for a successful closing. Many owners also value a special level of service, such as discreet handling or a targeted search for buyers who fit well into the neighbourhood.
The First Question: What Is My Apartment Building Worth?
Multifamily residential buildings are typically purchased as investment properties. Therefore, their valuation is based on the expected return. The income approach is usually applied.
With a few simplifications, the value can be roughly estimated:
- Basis: market-rate gross income (rental income)
- Deduction of non-allocable costs (service charges)
- Calculation of net income
- Determination of the purchase price based on the market-standard yield (approx. 3% to 4% in Munich)
In Munich in particular, current rents are often below market rates. Therefore, the valuation must also take into account the time it will take for all units to be leased at market rates.
Ultimately, the buyer’s outlook also matters: Is there potential for higher rents? Are there additional building rights? What will the building be worth after renovation?
Note: The frequently cited factor (multiplier) is the reciprocal of the yield. 3.00% = factor 33.33.
Targeting the right prospects
Since the amounts involved are often in the millions, it is crucial to target buyers with substantial capital. Many wealthy investors do not search for properties on their own but instead wait for offers to be presented to them.
"RIEDEL has personal connections with high-net-worth individuals, real estate developers, and family offices. Our offerings attract a great deal of attention—thanks to our market position and reputation for integrity, which have been built up over many years."
Preparation of the sale
To sell your apartment building, you’ll need to provide certain documents that are relevant to the appraisal and are typically requested by all prospective buyers.
Important documents for the sale:
- Land Registry Extract
- Floor Plans
- Lease Agreements
- Utility bills for the last 2 to 3 years
- Condition of the apartments
- Renovation work
- Contract overview (property management, building superintendent, etc.)
- Energy performance certificate
- Proof of insurance
"RIEDEL helps you compile all the necessary documents to provide buyers with a complete picture."
Exposé: the optimal presentation of your house
Even professional buyers appreciate an attractive presentation. Professional photos, up-to-date floor plans, and well-written descriptions increase the chances of a successful sale.
"RIEDEL prepares 30–40-page reports, summary tables, and calculations—resulting in a comprehensive compendium for prospective buyers."
Tours of Apartment Buildings
Viewings are often technical discussions, not just guided tours. To protect tenants, we first show them the common areas and, if applicable, a sample apartment. We only show additional units if there is serious interest.
"The goal is to get the buyer excited about the house—whether it's because of its current condition or the potential the property offers."
Negotiations and Purchase Agreement
In addition to the purchase price, there are other factors to consider:
- Effective Date of Acquisition
- Purchase Price Due Date
- Rental Income
- Use by Owner
- Warranties and Representations
"RIEDEL assists you with drafting contracts and, if necessary, recommends experts for legal or tax matters. We guide you through the process up to the notary appointment and ensure that agreements are clear."
Payment of the Purchase Price and Transfer of Ownership
After the contract is signed, the notary’s office coordinates the transaction. RIEDEL personally oversees the handover, the property’s condition, and the transfer of documents until full payment is received.
"Our mission: To provide you with valuable service—and we've been doing so for over 40 years."
Your Partner for the Successful Sale of Multi-Family Homes
You would like to sell your property?
Multi-family homes – we’ve known the market in Munich and the surrounding area for over 40 years. Thanks to our deep regional roots and a strong national and international network, we bring sellers and buyers together in a targeted manner.
With personalized support, professional appraisals, and full-service handling all the way through to the purchase agreement, we provide you with everything from a single source—reliably, discreetly, and with the highest quality.
Talk to us—and let’s work together to achieve the best possible sale of your property.
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