In some cases, demanded rents are falling: Germany’s most popular housing markets are cooling down

In some cases, demanded rents are falling: Germany’s most popular housing markets are cooling down

In some cases, the requested rents fall
Germany’s hottest housing markets are cooling down

For years, rents in the German metropolises seem to have risen inexorably. Meanwhile, however, the extremely expensive housing markets have apparently reached a level where further increases can no longer be forced – with one major exception.

In Germany’s most expensive housing markets, rents are in some cases stagnating or even falling. According to an evaluation by the real estate portal Immowelt, advertised rents in Munich, Germany’s top rents for many years, remained stable for the second time in a row in the third quarter of 2021. An existing apartment requires an average of 16.50 euros per square meter. In the second most expensive city in Germany, Frankfurt, rents have already fallen for two quarters in a row – by one percent in the third quarter to 11.60 euros per square meter. According to Immowelt, rents in Stuttgart have been falling for more than a year. Rents have stagnated recently in Hamburg.

Of the 14 cities surveyed by Immowelt, advertised rents rose in only five. A year ago, at eight o’clock, this was still the case in most metropolises. Now rents are stable in six of the cities and falling in three of them. According to Immowelt, after the years of growth in many large cities, a further increase in the market is no longer feasible. For many tenants, the charging limit has been reached. For example, according to an analysis of the portal from last September, the average rent for a family-friendly apartment in Munich is more than a third of income, even for academic families, but they are unaffordable for other families.

One of the exceptions to the latest developments is Berlin. There is a catch-up effect after the lifting of the rent ceiling by the Federal Constitutional Court. As in the second, the requested rents will also rise by three percent in the third quarter. Rents also rose by two percent in Cologne and Düsseldorf. In contrast, rents in the cheaper cities in East Germany and in the Ruhr area remain stable. There is still a relatively high vacancy rate, especially in the east.

However, the easing in metropolitan areas is offset by rising rents in the surrounding area and in smaller cities, which had been spared significant rent increases in recent years. Most recently, a survey by the Real Estate Association of Germany (IVD) for the first half of 2021 found that rents for existing apartments in cities with more than 100,000 inhabitants had increased by 2.1 percent compared to the previous year. In medium-sized cities with a maximum of 100,000 inhabitants, on the other hand, by 4.1 percent, in small towns with fewer than 20,000 inhabitants, even by 5.1 percent.

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