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The rental housing market in Germany’s metropolitan areas is stuck in a vicious cycle and is running worse and worse, a study shows. As the gap between existing rents and new offers continues to widen, tenants are avoiding moving because they have to pay more for a new apartment, according to a study by major broker JLL.
As a result, already tight supply is shrinking because fewer apartments are entering the market. This is causing new contract rents to rise again, further worsening the situation for those looking for accommodation. The actual demand for living space may be overstated.
JLL found particularly large differences between newly contracted and existing rents in Munich and Berlin. Changing an apartment there is particularly expensive, as the rent under a new contract is on average €8 or €7.50 per square meter higher than in an old apartment. Frankfurt follows closely with a difference of €4.80 per square meter. In Dresden and Duisburg, however, the difference is only around €1.50, and moving there appears to be easier.
Roman Heidrich, manager at JLL, said that in addition to providing more product through new construction, volatility must be stimulated. Exchange options could contribute to this. In addition, regulation should be considered to bring existing rents closer to market levels more quickly.
© dpa-infocom, dpa:240818-930-206056/1
The rental housing market in Germany’s metropolitan areas is stuck in a vicious cycle and is running worse and worse, a study shows. As the gap between existing rents and new offers continues to widen, tenants are avoiding moving because they have to pay more for a new apartment, according to a study by major broker JLL.
As a result, already tight supply is shrinking because fewer apartments are entering the market. This is causing new contract rents to rise again, further worsening the situation for those looking for accommodation. The actual demand for living space may be overstated.
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