SHARE
COPY LINK
For members

HOUSING

EXPLAINED: Here’s where rent prices are falling (and going up) in Germany

Looking for a new place to live? Here are the cities in Germany where rents are falling significantly.

EXPLAINED: Here's where rent prices are falling (and going up) in Germany
Flats in Berlin. Photo: DPA

The prices of new rental contracts across Germany fell by 0.1 percent in the fourth quarter of 2020 compared to the previous quarter, recent data shows.

And rents on new leases have fallen in 27 of the 50 most expensive cities in Germany, according to the housing index by research company F+B, which measures developments on the German real estate market.

F+B compiles data from more than 30 million properties throughout Germany to make up the index.

According to experts, the reasons for the decline in prices include demographic developments, such as immigration to Germany going down.

Plus housing experts say there are more deaths than usual being reported in Germany – also affected by the coronavirus pandemic – which is a contributing factor.

The population is also stagnating in the two largest German cities, Hamburg and Berlin.

The largest drop in new contract rents was recorded in Kempten in the Allgäu region of Bavaria (a drop in 12.9 percent), followed by Wunstorf in Lower Saxony (minus 9.9 percent). But Freiburg in Baden-Württemberg also saw a drop of 5.6 percent.

READ ALSO: What’s happening to housing prices in Germany during the pandemic?

Among the largest cities, new contract rents fell most significantly in Frankfurt am Main, where the rent level declined by 2.1 percent compared to the previous quarter.

“We note that there was a significantly weakened rental dynamic in the top seven locations, especially in the fourth quarter of 2020, i.e. after the first lockdown,” said F+B managing director Bernd Leutner.

The price of renting also eased further in Berlin. The average new contract rent was 6.4 percent lower than 12 months ago or 1.4 percent lower than in autumn 2020. The capital slipped to 126th place among the most expensive cities in the F+B index.

But there are also places where prices continued to rise strongly. In Garmisch-Partenkirchen in Bavaria for example, new contract rents rose by a whopping 10.6 percent in the fourth quarter compared to the third quarter. In Rüsselsheim in Hesse, F+B recorded an increase of 7.4 percent.

Munich house prices go down – but it’s still pricey

In contrast to rents, the trend in property purchase prices continues to point upwards.

READ ALSO: Will the pandemic spell the end of office life in Germany?

Prices for single-family houses (up 0.7 percent) and apartments (up 0.6 percent) rose compared to the previous quarter.

“We believe that the ongoing pandemic with the second lockdown since December has generated a sustained surge in demand here,” Leutner said.

In Munich, however, there’s been a surprising decline.

Prices for apartments there fell by an average of two percent compared to the previous quarter.

Particularly in the prime locations, there was a slight downward trend: for the first time in two years, the city dipped from an upper price of €15,000 per square metre to €14,950 – but it still remains the most expensive city to purchase property in Germany.

On average, an apartment there costs around €7,000 per square metre.

Check out The Local’s property listings, with hundreds of apartments for rent in Germany

Member comments

  1. This estimation is not realistic. They say for Berlin: während Berlin mit einem Durchschnittspreis von 3.940 €/m² auf Rangplatz 39 (vorher 36) . That is ABSOLUTELY not so. If you go and look the prices on immoscout – it is on average (80%) around 5000 EUR. These guys did not really try to go anb buy something in Berlin. Good luck with finding something for 3990 EUR… So why do that make these un realistic statistics … what purpose they serve ? well – could it be that they want to keep the overall indexes of life expenses low in an artificial way…

Log in here to leave a comment.
Become a Member to leave a comment.
For members

RENTING

Everything you should know about renting a furnished flat in Germany

Furnished properties are increasingly popular in Germany - but it's worth knowing the rules around them to make sure you don't get overcharged. Here's everything you need to know before signing the contract on a furnished flat.

Everything you should know about renting a furnished flat in Germany

For someone moving to a new country or city, it seems like a dream scenario: you find a new place, pick up the key, and simply move in and unpack. Everything you need, from your bed to your coffee table, is already there waiting for you. 

You can dispense with the endless trawls through IKEA showrooms and trips across town to pick up second-hand furniture on Ebay Kleinanzeigen – not to mention the stress of endless decisions on colour schemes and measurements. 

It’s exactly this that makes furnished flats such a popular choice with foreigners. While they may not be a long-term option, the ease and flexibility of being able to move-in straight away makes them a great short- or medium-term option while you’re finding your feet in a city.

So, what’s the catch? 

A search for furnished flats on any rental property portal will reveal all. 

For around 30 square metres in Hamburg – the size of a large hotel room – it’s not unusual to see prices of around €2,700 or more per month, which amounts to a pretty hefty €90 per square metre. In Berlin, €3,000 per month may well be the price you pay for a tiny studio in a central location: €100 per square metre.

In the banking hub of Frankfurt, things are marginally more affordable. Here, a 30-square-metre furnished flat will set you back around €1,500. But that’s still a pretty steep €50 per square metre. 

Listings like these can give the impression that landlords are allowed to charge whatever they please for a furnished property. Thankfully, that’s not true – though the rules can get a little bit murky, especially when it comes to short-term lets.

READ ALSO: Six confusing things about renting a flat in Germany

Here’s a few other things you need to know. 

What is a furnished flat?

If a flat is rented as a furnished flat, it should have at least the bare essentials that are required to live in it. Generally, that would mean a bed, wardrobe, table, chairs and sofa, etc. 

However, you can occasionally find furnished flats that are “löffelfertig” (spoon-ready), which as the name suggests means they have everything you need, right down to cutlery and crockery. 

Why are furnished flats more expensive?

Generally speaking, landlords are entitled to compensation for the furniture they buy for the property, which can push the monthly rent up by as much as a few hundred euros per month. 

Since they don’t have to be clear about these costs and how different parts of the rent are calculated, some landlords may inflate the base rent as well, meaning that tenants may end up paying way over the odds. 

It’s also worth knowing that if properties are specifically defined as either holiday or short-term lets, landlords are exempt from many of the usual rent controls. 

Furnished holiday flat Germany

A modern furnished flat in Mecklenburg Western-Pomerania. Photo: picture alliance/dpa/Bades Huk | BRITA SOENNICHSEN

If the furnished flat is considered to be a holiday let, then the tenant is often required to pay tourist tax for each night they stay there. In this case, the flat also doesn’t have to be furnished to a particularly high standard as it is only intended to be lived in for a very short time. You may find this type of flat absurdly pricey compared to normal rentals in the city, and if money is a concern it’s best to steer clear of holiday lets for longer-term stays. 

If you work in the city and are staying somewhere for more than two months, the landlord may decide to class the property as a temporary let. In this case, the landlord is exempted from clauses like the Mietpreisbremse (rent brake), which are designed to slow down the rate of rent increases, and you should have a clear duration or move-out date specified in your contract.  

It’s important to note that the landlord will usually have to give a good reason for restricting the time period of the rental. This could be the fact that they or their family want to use it themselves or are planning renovations at a later date. 

READ ALSO: Altbau vs Neubau: What’s the difference and which should I rent in Germany?

How much more can my landlord charge?

As mentioned above, holiday and temporary flats can often be rented out for eye-watering prices – but there are strict rules on categorising a rental flat as temporary or holiday accommodation.

For an ordinary furnished rental, the rent should usually be roughly based on standard prices for similar properties in the same area (a system known as the Mietspiegel), with any premium features or fixtures adding slightly more to the monthly rent. As mentioned above, the landlord can also charge a surplus for the furnishings they include in the flat.

The broad rule of thumb here is that this should be linked to the value of the furniture and its depreciation in value of the course of time. Though landlords aren’t forced to be transparent about the system they use, the two most commonly used ones are the Hamburg and the Berlin model. 

Furnished flat

A cosy bedroom in a furnished flat. Photo: picture alliance/dpa/VDM | Rauch

With the Berlin model, the landlord is allowed to charge two percent of the total value of the furniture each month.

The furniture is assumed to have a lifespan of 10 years, so if the furniture is new when the tenant moves in, they can charge two percent of the purchase price of the furniture each month. If all the furniture in a flat cost the landlord €5,000, that would amount to €100 extra in rent each month. The value of the furniture goes down by ten percent per year, so after five years the landlord would charge €50 per month on top of rent, and after ten there would be no surcharge.

The Hamburg model assumes that furniture goes down in value over the course of seven years, after which time it’s worth just 30 percent of its purchase price. The amount that the tenant pays towards the cost of the furnishings each year is based on these calculations.

READ ALSO: 

Can I take furniture out of a furnished flat?

Yes! If you’re someone who likes to put your own stamp on a place, then you’re fully entitled to replace some of the furniture with your own.

But – and this is a big ‘but’ – you’ll be responsible for storing the furniture safely until you move out, and putting everything back in its previous place.

In other words, we don’t recommend chucking the coffee table out on the street with a ‘Zu verschenken’ label before moving in your own piece. We guarantee your landlord will not be amused once they find out. 

To clarify what’s meant to be in the flat when you move in (and when you move out), tenancy law experts recommend having a full inventory in the contract. That should help you avoid any nasty disputes in the future.

What if the furniture is damaged, missing or defective? 

If furniture is damaged, missing or unusable, you’re entitled to have it repaired or replaced and can also ask for a rent reduction.

Once again, it’s useful to have a full inventory of what should be in the flat to help you with these negotiations.

Do tenants in furnished flats have the same rights as other tenants?

Generally, yes. Having furnishings inside a property doesn’t change the legal status of the contract.

That means that your landlord can’t, for example, suddenly ask you to move out at short notice and without any cause. As mentioned, they also need to have a specific reason for limiting the duration of your contract – otherwise the move-out date isn’t valid. 

SHOW COMMENTS