Despite the corona pandemic and enormous price increases in recent years, rents in the largest German cities will continue to climb in 2021. This is the result of the new rental price forecast by the immowelt Internet portal for large cities with more than 500,000 inhabitants. By the end of the year, asking rents for existing apartments will continue to rise in 11 of the 14 cities examined.
In Munich, Germany’s most expensive city, the price curve is noticeably flattening out. After the enormous increases in recent years, the asking rents for existing apartments will probably only go up by 1 percent. At the end of the year, tenants will have to reckon with 16.10 euros per square meter. Despite the comparatively small increase, Munich is still far ahead of all other major cities at the end of 2021.
Strongest increase forecast in Stuttgart
After Munich, Frankfurt follows in second place on the price scale. After a forecast increase of 3 percent, the price per square meter at the end of the year is 12.20 euros. Behind it, Stuttgart is catching up strongly. In the Swabian city, the strongest increase is forecast by the end of the year: The prices for existing apartments will increase by 6 percent by the end of the year, so that the square meter will then probably cost 12.10 euros.
Further increases are also likely in Düsseldorf, Cologne and Nuremberg (each +4 percent). An increase of 5 percent is also forecast for Leipzig. With square meter prices of 6.80 euros at the end of 2021, the price level is significantly lower than in western German cities.
“The Corona crisis has shown how stable the residential property market is: rents have not collapsed, on the contrary, they have even risen,” says Prof. Dr. Cai-Nicolas Ziegler, CEO of immowelt. “The interest in real estate is greater than ever, the range – especially in the low-priced segment – is still manageable. We therefore firmly assume that there will be no trend reversal this year either, although the prices are no longer so increase sharply as in previous years. “
Berlin’s rent cap leads to falling prices
The only cities examined in which falling asking rents are predicted are Hamburg (-1 percent) and Berlin (-5 percent). While the high level of new construction activity and saturation effects are noticeable in Hamburg, the rent cap is regulating prices down in Berlin. From 2019 to 2020, the asking rents for existing apartments in Berlin had already fallen by 8 percent. After a further decline, the rent will level off at 8.70 euros per square meter at the end of 2021. For comparison: Before the introduction of the rent cap, rents of 11.10 euros per square meter were still being charged.
However, the negative side effects of the law are now also becoming apparent: The proportion of cheaper existing apartments in the total supply has declined, while the proportion of unregulated, expensive new buildings is increasing.
New buildings between rise and fall
The already high-priced new buildings will be further decoupled from the existing properties in many cities in the course of the year. In Berlin, an increase of 6 percent is forecast, while the rents of existing apartments are falling. New buildings are excluded from the Berlin rent cap. The square meter in a new apartment will then cost 13.20 euros.
As with existing properties, the strongest increase in new buildings is likely to be in Stuttgart: plus 7 percent by the end of the year. An increase of 5 percent was calculated for Dresden and Leipzig. The price differences are also large for new buildings: in Stuttgart, tenants of a new building pay 16.30 euros, in Munich (+3 percent) even 20.10 euros per square meter. In Leipzig it is just 8.80 euros per square meter. In many other cities, renting an existing apartment is already more expensive.
But new build rents are not rising in all cities. A decrease of 6 percent is assumed in Dortmund and 1 percent in Bremen. Interest in new buildings has declined in both cities in the past, so the asking rents for these apartments fell slightly. This trend is likely to continue until the end of the year. (ots)
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