Apartment rents are also likely to increase further in the German capital.
(Photo: IMAGO/Jürgen Held)
Dusseldorf The rise in residential rents in Germany has accelerated again after a phase of relatively moderate growth. According to data from the German Economic Institute (IW), in the third quarter the asking rents without heating rose by an average of 5.8 percent compared to the same quarter of the previous year. That was more than the average for the third quarter of the past three years (plus 4.5 percent). In all federal states, growth exceeded the medium-term trend.
“It shows that the momentum is increasing,” said IW real estate expert Michael Voigtländer. People were increasingly looking for rental accommodation, while some landlords were charging higher rents, apparently because of high inflation. In addition, there are catch-up effects in rural regions that still offer comparatively cheap housing.
On behalf of Deutsche Invest Immobilien AG, the IW also calculated on the basis of advertisements for rented apartments that advance payments for ancillary costs, including heating and hot water costs, have increased by an average of 48 percent within a year. For homes heated with gas, advance payments rose by 56 percent.
All in all, this leads to an average increase in total rent of 10.9 percent in the period from September 2021 to September 2022. In regions with a low level of net cold rent, ancillary living costs now make up around a third of the total rent.
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Frank Wojtalewicz, CEO of Deutsche Invest Immobilien, said at the presentation of the third ancillary housing cost report on Monday: “Ancillary housing costs have developed moderately in recent years. Now they contribute a large proportion of the total rent”.
Tenants are faced with a high additional financial burden simply due to the higher ancillary costs. According to the IW, this means annual additional costs of an average of 506 euros for a 75 square meter apartment. For apartments with particularly high advance payments, additional costs of up to 900 euros can arise. In apartments that are heated with gas, the down payments for the warm ancillary costs have increased by an average of 568 euros.
A look at the rents without taxes shows that among the federal states, the rents offered increased the least in Baden-Württemberg, Saxony and Hesse at a good four percent compared to the same quarter of the previous year. They climbed the strongest in Saarland (plus 7.9 percent), in Brandenburg (9.1 percent) and Mecklenburg-Western Pomerania (10.3 percent).
The annual comparison of asking rents was based on almost 1.5 million advertisements on major real estate portals. The asking rents do not yet mean any deals, but show the direction on the market. Also, rents can rarely be negotiated.
In the metropolises, there were relatively moderate increases in asking rents in Frankfurt (plus 1.4 percent compared to the same quarter of the previous year), Stuttgart (2.4 percent) and Munich (3.5 percent). On the other hand, asking rents in Düsseldorf (5.9 percent), Leipzig (7.8 percent) and Berlin (8.3 percent) increased in particular.
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“In the very expensive cities, the growth is lower – probably due to a lack of solvency,” said Voigtländer. After years of the real estate boom, rents in the major cities have already reached a very high level.
High interest rates on loans and construction prices: people are switching to the rental market
Higher lending rates, high construction prices and record inflation are making home ownership less affordable. Interest rates on ten-year real estate loans have more than tripled since the beginning of the year. Many people are therefore switching to the rental market. The shifting demand will increase the upward pressure on rents there, according to a recent study by Landesbank Helaba.
Recently, DZ Bank and the Association of German Pfandbrief Banks have observed that rents under new contracts have risen more sharply with growth of around five percent over the year. The reason for the “noticeably increasing rents” is not only the shift in demand but also the increasing immigration with many refugees from Ukraine, according to DZ Bank. A high demand for affordable housing meets falling vacancies in the cities.
With agency material.
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