The fact that rents are rising and rising is not a new phenomenon. People groan under the developments on the housing market. However, new figures on rent increases in major German cities are likely to be alarming.
Rising rental prices, a shortage of supply, higher interest rates on loans – an evaluation by the real estate consultancy Jones Lang LaSalle (JLL) shows the dramatic situation on the real estate market.
Rent: They increased the most in Berlin and Leipzig
How much have rents increased? According to an evaluation by the real estate consulting company Jones Lang LaSalle (JLL), rental prices rose significantly in the first half of 2023. Rents in the metropolises of Berlin, Hamburg, Munich, Cologne, Frankfurt, Dusseldorf, Stuttgart and Leipzig have increased by 6.7 percent. In the same period a year ago, the increase was “only” 3.7 percent.
Where have rents increased the most? The “negative winners” are Berlin and Leipzig. Rents have risen by 16.7 percent in Berlin and by 11.1 percent in Leipzig. In the other major cities, the increases were much more moderate. In Munich the increase was 5.0 percent, in Frankfurt 1.9 percent. In Stuttgart, asking rents even fell slightly by 1.3 percent.
What is the average asking rent? According to JLL, it is 15.38 euros per square meter in the big cities. In independent cities it was ten euros per square meter and in the rural districts 8.61 euros. A city-country divide becomes clear.
What are the causes? “In all the metropolises under consideration, there is an enormous shortage of supply, which will be exacerbated by the faltering housing construction,” said JLL residential real estate expert Roman Heidrich. “Therefore, there is no end to the rent increases in sight.” In addition to the shortage of supply, the reason for this is the rise in lending rates. Because these have led to people often no longer being able to afford to own their own home and instead pushing into the rental market.
What about the purchase prices? According to JLL, the purchase prices for new buildings and existing apartments fell by seven percent in the first half of the year. In the same period of the previous year, they had risen by 7.5 percent. While residential real estate in Berlin has become slightly more expensive, there have been significant declines in all other metropolises – most notably in Munich, Stuttgart and Düsseldorf. According to the Federal Statistical Office, they fell by 6.8 percent in the first quarter compared to the same quarter of the previous year.
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