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RENTING

Single people and large families ‘pay more for rent’ in Germany

Tenants in Germany are having to pay higher prices for one-room flats and flats with more than five rooms, according to a new analysis.

A view of apartments in Düsseldorf.
A view of apartments in Düsseldorf. Photo: picture alliance/dpa | Marcel Kusch

The study by housing market data experts empirica regio found that singles and large families pay the highest rents per square metre in Germany.

On average, tenants paid €9.84 per square metre ‘cold rent’ for a one-room flat throughout Germany last year, not including add-on costs or Nebenkosten. Flats with five or more rooms were offered on average for €8.78 per square metre.

In contrast, flats with two rooms were cheaper – at €8.72 per square metre, as were three-room flats at €8.41, and four-room flats at €8.42.

The situation is particularly bad in large cities, including Munich, Hamburg, Frankfurt and Berlin. In these areas, families paid €13.71 per square metre for flats with five or more rooms on average last year, and one-room flats were €13.50 per square metre.

READ ALSO: The most expensive (and cheapest) cities in Germany to rent a room

Both are above the average rent of €12.79 per square metre. Two-room flats (€12.21 per square metre), three-room flats (€12.05 per square metre) and four-room flats (€12.77 per square metre) were offered at a cheaper rate.

In Germany, a one-room flat is an apartment with the bedroom and living room combined. There is a separate bathroom, and usually a separate kitchen (although sometimes the one room can include the kitchen). A two-room flat consists of a living room and a separate bedroom. 

According to the data, there were similar patterns in other medium-sized cities. In regions that are experiencing a decline in growth, however, one- and two-bedroom flats were particularly in demand and therefore more expensive than other types of flats.

A major issue in cities is that bigger flats are not being built as often as smaller apartments. This means families will struggle to find suitable homes, and the cost for the remaining flats will go up. 

READ ALSO: How property prices are falling in major German cities

“We see that especially in big cities too few family-friendly flats are being built,” said Jan Grade, CEO of empirica regio.

“The real estate industry is currently often reacting to the growing number of households by completing single flats. The target group of families is in danger of being lost from view.

“In order to absorb the additional burden on singles and families, one-bedroom flats and large flats must become more affordable. This can only be done by increasing supply.”

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

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RENTING

EXPLAINED: The German cities where rents are rising fastest this year

People searching for a flat in German cities including Hamburg, Cologne and Berlin are in for a nasty surprise as rents are going up significantly, according to a recent study.

EXPLAINED: The German cities where rents are rising fastest this year

Real estate platform ImmoScout24’s recent ‘WohnBarometer’ shows the development of asking rents for the second quarter of 2022 in Germany as a whole, and the seven largest city areas.

Asking rents in new lettings for existing flats rose above €12 per square metre for the first time in Hamburg, and above €11 per square metre in Berlin.

In Berlin, Frankfurt am Main and Stuttgart, asking rents for new-build flats have risen above €15 per square metre.

What’s the picture across Germany?

For the second quarter of 2022, the WohnBarometer shows that the asking prices for rental flats across Germany have risen significantly more than in previous quarters.

On average, the asking price for existing flats was 2.7 percent more expensive to let than in the previous quarter. Newly built flats were on average 1.8 percent higher than in the previous quarter.

The average asking rent for existing flats in the second quarter was €7.66 per square metre. New-builds were offered for an average of €10.59 per square metre.

Meanwhile, demand for rental apartments shot upwards by 48 percent in the second quarter of 2022.

READ ALSO: Single people and large families ‘pay more for rent in Germany’ 

Where is the situation particularly bad for existing rentals?

Those eyeing up big cities as a place they want to settle in face a particularly hard time. 

Hamburg recorded the highest price dynamics in the area of existing rental flats older than two years in the second quarter – but it remains in fourth place in the rental price comparison of the seven largest German cities.

On average, the rent level in the Hanseatic city was €12.22 per square metre in the second quarter of this year. A rental flat with 70 square metres costs an average of €855.40 per month ‘cold’ – before other costs – Nebenkosten – are added on.

Flats in Hamburg's Eimsbüttel area.

Flats in Hamburg’s Eimsbüttel area. Photo: picture alliance/dpa | Daniel Bockwoldt

The real estate portal expects rents for existing properties in Hamburg to rise by nine percent this year alone. That would be two percentage points more than the inflation rate expected by the Bundesbank for 2022.

And in a city with a home ownership rate of 21 percent, this affects many of the 1.85 million residents.

From the first to the second quarter of 2022, asking rents in flat ads in Hamburg have risen by five percent. 

This is by far the highest value in Germany’s seven largest cities. Cologne achieved the second highest increase with 3.7 percent, while rents in Stuttgart fell by 0.7 percent.

In Berlin, asking rents for existing flats rose by just 1.4 percent, but broke the €11 per-square-metre mark.

Berlin nevertheless remains one of the cheapest of the large cities in Germany. Only Düsseldorf, at €10.81 per square metre on average, is lower. Cologne is the third least expensive place to rent with an average of €11.58 per square metre, according to asking prices for existing properties.

The graph shows the average costs per square metre for existing properties.

The graph shows the average costs per square metre for existing properties. Screenshot: ImmoScout24

Munich remains the most expensive city for renting with an average price per square metre of €16.93 per square metre. With a decrease of 0.7 percent for existing rental flats to €12.26 per square metre, Stuttgart was the only city to record a slight price decline in rents compared to the first quarter.

What about new build flats?

In the second quarter of 2022, Berlin recorded the largest price increase among the cities for new flats for rent, with an increase of 4.5 percent. These were offered in new lettings on ImmoScout for an average of €15.37 per square metre, exceeding the threshold of €15 per square metre.

In the German capital, the average monthly ‘cold rent’ for a new flat with 70 square metres is €1,075.90. Berlin is now above the level of Düsseldorf, Hamburg, Frankfurt am Main and Stuttgart.

But Frankfurt and Stuttgart also cracked the €15 threshold for the first time in the second quarter. In the financial capital, the rent level rose by 2.6 percent from the first to the second quarter to €15.17. Stuttgart is just above this at €15.24 per square metre.

In Munich, asking rents for new flats increased by 3.1 percent. With an average asking rent of €19.64 per square metre, Munich remains the most expensive city in Germany. In Cologne, asking rents for newly built rental flats rose only moderately, by 1.7 percent to €12.88 per square metre.

Graph shows the average costs per square metre for new build flats in cities.

Graph shows the average costs per square metre for new build flats in cities. Screenshot: ImmoScout24

How is demand affecting the situation?

Experts say the dynamics are changing on the rental and property markets in Germany.

“Demand continues to be significantly higher than the available supply,” said Thomas Schroeter, managing director of ImmoScout24.

“Due to the rise in interest rates, demand has shifted from buying properties to renting. As a result, rent-seekers now face even more competition when looking for a flat.”

READ ALSO: How property prices are dropping in major German cities

Immoscout24 registered the highest demand for rental flats in Berlin, with a whopping 217 enquiries on average per flat advertisement per week. In Cologne, the demand was 78 enquiries per ad, and in Hamburg, the real estate site registered 68 enquiries per ad on average.

What will happen in future?

It doesn’t look like the situation will ease off this year. Experts predict that by the end of 2022 in Hamburg, for instance, the price increase for existing flats will be nine percent – the highest in Germany.

In Berlin, by the end of the year, rents for existing apartments are expected to rise by 5 percent overall, and in Cologne and Stuttgart, 6 percent. 

Vocabulary 

Existing apartments/flats – (die) Bestandswohnungen

Asking price – (der) Angebotspreis

New build/new construction – (der) Neubau

Basic rent or ‘cold rent’ – (die) Kaltmiete

Rent including other costs – (die) Warmmiete

We’re aiming to help our readers improve their German by translating vocabulary from some of our news stories. Did you find this article useful? Let us know.

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