Frankfurt am Main/Leipzig – The rise in residential rents has Saxony as in the other federal states it accelerated in the third quarter. However, the increase in required rents in Bavaria was the lowest nationwide at 4.1% compared to the same quarter a year earlier.
Rental prices in Leipzig are getting more and more expensive. Compared to other federal states, however, it is now slower than before. © Simon Klemm/123RF
As can be seen from the data from the German Economic Institute (IW), this was higher than the average for the same quarter over the past three years (3.0%). Requested rents increased most in Brandenburg (9.1%) and Mecklenburg-Western Pomerania (10.3%). For Germany, the value is 5.8%.
“It shows that momentum is building,” said IW real estate expert Michael Voigtländer. People were increasingly looking for rental accommodation, while some landlords were demanding higher rents, apparently due to high inflation. Furthermore, there are catch-up effects in rural regions which still offer relatively cheap housing.
In the big cities, relatively limited increases in rents requested were recorded in Frankfurt (up 1.4 per cent compared to the same quarter of the previous year), Stuttgart (2.4 per cent) and Munich (3.5 per cent).
On the other hand, requested rents increased in particular in Düsseldorf (5.9 percent), Leipzig (7.8 percent) and Berlin (8.3 percent).
“In very expensive cities, growth is lower, probably due to lack of creditworthiness,” said Voigtländer. After years of real estate boom, rents in big cities have already reached very high levels.
Higher loan rates, high building prices, and record inflation are making home ownership less affordable. Interest rates on 10-year home loans have more than tripled since the start of the year.
Many people are therefore switching to the rental market. Shifting demand will put upward pressure on rents there, according to a recent study by Landesbank Helaba.
