No end in sight for Munich's real-estate rush

Munich, capital of Bavaria, is famous for its beer gardens, historic architecture and proximity to the Alps. Its powerful economy is home to six of Germany’s largest companies, including BMW, Siemens and Allianz. More recently, however, Germany’s third-largest city has become notorious as the country’s most exorbitantly-priced housing market. Want a home in a prestigious development close to the historic center? Prepare to fork out €500,000 ($581,000) for a 40 square meter studio, and twice that for an 87 sq meter apartment. With promising sites few and far between in the city center, the attention of buyers and developers has turned to formerly unfashionable neighborhoods like Alt-Moosach, Alt-Perlach, Feldmoching and Milbertshofen. Districts reasonably close to the Englischer Garden – Munich’s much-loved 1.4 square mile city park – have seen massive demand for single and semi-detached houses, with price growth steady at around 10 percent per year. Those priced out of the market can take small comfort in a slight slowdown in the Munich real estate upsurge. Last year, 17 of the city’s 25 boroughs saw double-digit increases in property prices. This year, that came down to just eight.