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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…

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MONEY

Wohngeld: How people in Germany can get help with rising living costs

Many households in Germany could be eligible for increased financial support with their rents and bills from next year. We break down who should apply and how much help they could receive.

Wohngeld: How people in Germany can get help with rising living costs

The cost of living is rising across the board, and nowhere is this being felt more than in the home. For over a year, gas and electricity bills have been soaring and people on low incomes have been left wondering how to make ends meet.

While there is support available for people in this situation, it seems that many households in Germany aren’t aware that they could be eligible to apply for Wohngeld, or housing allowance, to help them with their expenses. What’s more, the amount of money people can get is set to rise at the start of next year.

Here’s what you need to know.

What exactly is Wohngeld?

Wohngeld, or housing allowance, is a form of financial aid for low-income households in Germany. It’s intended to help with the general costs associated with housing, such as monthly rents and utility bills.

Even people who own their own homes are able to get support with their mortgage repayments and building management costs (known as Hausgeld). However, they do have to fulfil certain criteria, like earning under a certain amount per month.

Unlike long-term unemployment benefit, which also includes a stipend for rent and bills, Wohngeld is intended for people who don’t rely on any other form of state support. That could include single parents or people with minimum wage jobs who spend a large proportion of their income on rent.

It means that people on jobseekers’ allowance and students with state loans and grants aren’t able to apply for Wohngeld. 

READ ALSO:

How much money can people receive?

That depends on a range of factors such as where you live, how high your rent is and how much money you earn this month. However, one thing that’s clear is that Wohngeld is likely to rise significantly at the start of next year.

On Wednesday, cabinet ministers voted through proposals from Housing Minister Klara Geywitz (SPD) to hike the monthly allowance by around €190 on average. That means that instead of receiving €177 per month, the average household on Wohngeld will receive around €370 per month starting in January. 

It’s worth noting that Geywitz’s reforms still need to clear a vote in the Bundestag, but with the governing coalition of the SPD, Greens and FDP behind the move, it’s likely that they will. 

The Housing Ministry has also put together an online tool that can calculate the amount of Wohngeld each household is entitled to. At the moment, this still calculates the allowance based on the current rates – but it will be updated if the reforms are passed by parliament. 

Who’s eligible for Wohngeld?

That depends on a complex calculation based on factors such as income, the number of people in a household, the size and location of the property and how high monthly housing expenses are. There’s no straightforward income threshold that people can refer to, which could explain why thousands of households who could potentially get Wohngeld never apply for it.

The best way to check if you’re currently eligible is to use the government’s Wohngeld calculator tool. But as we mentioned above, this is still based on the current criteria and monthly rates. 

As well as hiking the monthly allowance, Geywitz also wants to expand the criteria so more households are eligible for Wohngeld.

At the moment, around 600,000 households in Germany receive Wohngeld. This could increase by 1.4 million to two million under Geywitz’s plans. From next year, people earning minimum wage and people on low pensions are set to be among those who are able to apply. 

READ ALSO: EXPLAINED: When should I turn on my heating in Germany this year?

Sound good – where do I sign up?

In general, the states and municipalities are responsible for handling Wohngeld applications. That means you should apply at the local Wohngeldamt (housing allowance office), Wohnungsamt (housing office) or Bürgeramt (citizens’ office) in your district or city. 

If you’re unsure where to go, searching for ‘Wohngeld beantragen’ (apply for housing allowance) and the name of your city or area should pull up some search results that can guide you further. 

Apartment blocks in Berlin Marzahn.

Apartment blocks in Berlin Marzahn. Photo: picture alliance / Matthias Balk/dpa | Matthias Balk

Alongside an application form, you’ll likely have to submit a tenancy agreement, ID, information on your residence rights and proof of any income or state support you already receive. Other members of your household may also have to submit similar financial information. 

You should also be registered at the address you’re applying for Wohngeld for. 

READ ALSO: Germany to spend €200 billion to cap soaring energy costs

Are there any other changes to Wohngeld I should know about?

Anyone already on Wohngeld, or who receives it between September and December this year, is also entitled to a special heating allowance to help with winter energy costs. This is also set to be given to students and trainees receiving a BAföG loan or grant.

For students and trainees, the heating allowance is set at €345 per person. Meanwhile, the amount given to Wohngeld recipients will vary on the size of the household.

Single-person households will receive €415, two-person households will get €540 and there will be an additional €100 per person for larger households. 

This is likely to paid out in January. 

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