Munich

In Munich, the housing market remains extremely tight, with only around 1% rental vacancy. The population continues to grow, yet new housing completions and permits are declining, deepening the supply shortage. About 15% of residential properties are owned by institutional investors. Among residents, the majority—over 70%—rent their homes, with home ownership below 30%, reflecting Munich’s city profile and Germany’s overall trend, where renting is dominant.

As of 2025, the median rent for apartments is approximately 24.11 euros per square meter for new contracts, while rents in the prime segment have reached 36.10 euros per square meter. Existing apartments are rented at around 23.86 euros per square meter. For buyers, the median price sits at roughly 8,611 euros per square meter for the overall stock, with newly built condominiums averaging up to 11,000 euros per square meter, making Munich the most expensive city in Germany for housing.

Public housing—including both publicly owned and socially subsidized housing—plays an essential but limited role. Social/public housing accounts for just about 4% of the city’s housing stock. In Munich, public housing refers to municipally owned units, while social housing is earmarked for low-income households and maintained at subsidized rents. Not all public housing is social, but all social housing is publicly regulated; social housing is allocated based on need, with significant subsidies and strict resale restrictions.

Munich faces one of Europe’s most acute housing crises, with demand far outstripping supply amid continuous population growth. As of 2024, the city’s population surpassed 1.6 million, increasing by almost 15,000 in a single year. Despite this, housing completions plummeted by 34% to around 6,500 units, and building permits also fell, worsening the chronic shortage. The gap between needed and actual completions amounts to a supply deficit of 20 units per 10,000 residents, among the highest in Germany’s major cities.

Rents have soared to unprecedented levels. In 2025, the median rent for new leases is 24.11 euros per square meter, the country’s highest—38% above the average for large German cities. The purchase price for existing apartments has also reached 8,611 euros per square meter, with new builds up to 11,000 euros. Home ownership remains very low while over 70% of residents rent, intensifying exposure to the rent increases. Vulnerable groups—low- and middle-income renters, young families, migrants, students, and the elderly—are particularly hard-hit, as affordable options are scarce and the share of social or public housing is only around 4%.

Institutional investors are an increasingly influential force, accounting for a rising share of property transactions and often outbidding local families. Altogether, the crisis exacerbates inequality, restricts mobility, and limits Munich’s social and economic diversity.

Munich’s city administration is actively addressing affordable and sustainable housing through a combination of municipal programs, regulatory changes, and construction initiatives focused on social balance and environmental standards. The city has communicated ongoing targets in line with federal and state goals: notably, maintaining and expanding social and public housing stock, and promoting sustainable construction that aligns with Germany’s Energy Efficient Home 55 (EH55) standard for all new buildings from 2025. This moves the city toward higher energy efficiency and lower carbon emissions in both new and existing housing.

Key local programs include the Munich Model (München Modell), which provides affordable housing at below-market rents for middle-income households and families with children, with initial rents starting at around 12 euros per square meter. Low-income tenants can apply for housing benefit (Wohngeld), a rent subsidy calculated according to household size, income, and rent burden. Expansion of social housing is incentivized through subsidies and tax breaks for developers, with the city aiming for a 30% social housing quota in new projects, and extending rent-controlled periods up to 20-30 years. Additionally, from 2025, income limits enabling access to housing subsidies are being increased, broadening eligibility. Recent measures also streamline approval procedures for new construction and reduce tenant fees to lower barriers to mobility. All efforts are designed to bolster affordable rental supply and accelerate the shift toward sustainable buildings, though completion rates remain behind targets due to persistent market pressures.

Locally, these initiatives are called: München Modell, Wohngeld, and Sozialwohnungsförderung.

Housing cooperatives in Munich play a distinct role as providers of affordable, secure, and long-term rental housing, emphasizing community and stability. The sector is served by about 352 cooperatives in Bavaria, managing roughly 190,000 residential units statewide; however, within Munich itself, cooperative housing is a relatively small fraction of total housing, estimated at below 10% of the city’s stock, though precise figures for Munich are not regularly published. Cooperative rents average around 6.68 euros per square meter, much lower than market rates, creating a natural brake on rent increases and high turnover.

Current dynamics in the sector include low vacancy, high demand, and strong member retention—residents typically stay about 20 years in cooperative homes. Due to rising construction costs and restrictive borrowing conditions, new cooperative construction is challenged, but demand remains robust as residents seek alternatives to high-priced private rentals.

Munich supports cooperative housing through targeted programs and regulatory frameworks like SoBoN (socially equitable land use), which require a share of new developments to be allocated to social and cooperative models. The city also promotes the formation and strengthening of cooperatives via counseling, land allocation on favorable terms, and participation in planning decisions. These measures are complemented by broader city programs such as the Munich Model and expanded housing subsidies, all designed to help maintain and expand affordable cooperative living in a pressured market.