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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.

People in a flat complex in Hamburg.
People in a flat complex in Hamburg. Photo: picture alliance/dpa | Daniel Bockwoldt

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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For members

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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