Emmanuel Thomas, DPA I Tuesday, July 25, 2023
MUNICH – High demand for living space in German cities, slow new construction and property investors delaying purchases are driving up pressure on the rental market, a new study has found.
In the first half of the year, asking rents in Berlin, Hamburg, Munich, Cologne, Frankfurt, Düsseldorf, Stuttgart and Leipzig rose by an average of 6.7%, according to a report published on Tuesday by real estate specialist Jones Lang LaSalle (JLL). In the same period last year, the rents increased by 3.7%.
Asking rents rose particularly strongly in Berlin and Leipzig, where double-digit percentage increases were recorded according to the study. In Berlin, there was a net influx of 86,000 people in 2022, while only around 17,000 new flats were completed, JLL explained. The Berlin housing market is becoming increasingly tight, it said.
In other metropolises, the rent increases were more moderate, and in Stuttgart asking rents fell slightly.
“There is an enormous shortage of supply in all the metropolises considered, which will be exacerbated by the faltering residential construction,” said JLL residential real estate expert Roman Heidrich.
“An end to rent increases is therefore not in sight,” he said. Pressure is also coming from increased interest rates on loans, which are keeping prospective buyers from acquiring properties and putting them on the rental market, he explained.
The study also showed how expensive housing is in Germany’s eight major cities. There, rental apartments were offered at an average of €15.38 ($17.04) per square metre, around 50% more expensive than in regional urban centres (€10 per square metre) and 79% more expensive than in the rural districts (€8.61 a square metre).
