Rents rising faster than inflation in many German cities
Prices on the German rental market have risen by up to 9 percent in the past year, according to a new report by immowelt. In most major German cities, rents rose between July 2022 and July 2023, in some places outstripping the rate of inflation - and there doesn’t seem to be any relief on the horizon.
Rents rise in 69 of 80 biggest German cities
In an annual comparison of asking rents for houses and apartments across Germany, immowelt found that rents have risen over the past 12 months in 69 out of the 80 biggest cities. For the analysis, immowelt looked at the asking rent for a typical apartment (80 square metres, three rooms, on the second floor, utilities not included) listed on its site, and compared the figures to those from the previous year.
In Munich - already the most expensive city in Germany - prices are continuing to rise. Average asking rents have risen by 5,2 percent over the last 12 months, to 17,55 euros per square metre. In Hamburg and Berlin, asking rents rose by 3,9 percent, in Stuttgart by 2,0 percent, Frankfurt 2,4 percent and Cologne 2,7 percent.
Continuing a long-standing trend, prices are surging most significantly in smaller cities and suburbs, as demand rises with the influx of people moving away from major metropolises seeking better deals. Siegen showed the highest increase in the immowelt study, with asking rents rising by 9 percent in a year. The other strongest increases were all also recorded in North Rhine-Westphalia: in Mülheim an der Ruhr (7,8 percent increase), Hamm (7,7 percent) and Bottrop (7,6 percent).
In 10 of the 80 cities included in the study - Aachen, Bottrop, Hamm, Heilbronn, Jena, Monchengladbach, Mülheim an der Ruhr, Oldenburg, Remscheid and Siegen - rents are rising even faster than the current inflation rate of 6,4 percent - putting an even bigger burden on renters already struggling to cope with rising costs for food and energy.
No sign of rents in Germany reducing in near future
According to Felix Kusch, managing director of immowelt, there is little chance of a turnaround in the near future. “The record influx to Germany and the slump in residential construction are putting additional pressure on the already strained rental markets,” he said in a press statement. “It is particularly alarming to look at the number of building completions, which are reaching a new low every month.”
Experts currently estimate that Germany is short of around 700.000 apartments, a number that will continue to grow as Germany records high immigration figures. Last year, net migration reached a record of 1,5 million people. The government has pledged to build 400.000 new apartments per year, but that goal seems a long way off. A recent study found that rising costs could squish housing construction by 32 percent by 2025. Just 200.000 apartments are expected to be completed this year.