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EXPLAINED: The small German cities where rents are rising the fastest

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EXPLAINED: The small German cities where rents are rising the fastest
Hameln, Lower Saxony, pictured in summer 2022. Rents continue to grow in this medium-sized city. Photo: picture alliance/dpa | Moritz Frankenberg

Throughout Germany, cities with between 50,000 and 100,000 residents are seeing a spike in demand for flat rentals. A new study shows how much prices are in turn rising - and where bargain hunters can still find a good deal.

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Rents in small cities rose by up to 18 percent last year, according to an evaluation by Immowelt. The real estate portal analysed existing flats, ranging in size between 40 to 120 square metres, and in cities with 50,000 to 100,000 inhabitants.

According to the report, asking prices for rents rose in 99 of the 110 evaluated cities. In 13 of these, the increase stood in the double-digit percentage range.

By comparison: in 2021, prices had risen in 90 small cities, and of these, only in six cities by more than ten percent.

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

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Demand is higher than supply

According to Immowelt, there are several reasons behind the rising rents. Many high-priced, small cities are located close to large cities, where rents are even higher. They provide easy access for commuters or weekend trips, while often offering more spacious rentals in quieter neighbourhoods.

In addition, there is a housing shortage in high-priced medium-sized cities, which means that demand is higher than supply.

Pressure on the rental market

At the same time, according to Immowelt, interest in rental flats has continued to increase over the past year. Demand, measured by inquiries per property, increased by 137 percent year-on-year, according to the report.

The Rheintorturm in Konstanz, the most expensive medium-sized cities for renters. By JoachimKohlerBremen - Own work, CC BY-SA 4.0

The fact that fewer and fewer people are able to buy their own homes due to the rise in construction interest rates is further upping the pressure on the rental market. The high amount of immigration to Germany has also aggravated the housing shortage, wrote Immowelt. 

Largest increases in North Rhine-Westphalia and Lower Saxony

According to Immowelt, the highest increases were recorded in small cities in North Rhine-Westphalia and Lower Saxony. In Dormagen in North Rhine-Westphalia, median asking rents climbed from €8 to €9.40 within a year. 

That corresponds to a plus of 18 percent. The city's location between Düsseldorf and Cologne makes it particularly attractive for commuters who want to avoid the high rents of the big cities.

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In Hameln in Lower Saxony, tenants also have to pay significantly more than a year ago: following an increase of 17 percent, median asking rents there are currently €7 euros per square meter. 

In Delmenhorst, west of Bremen, apartments are currently on offer for €8 per square metre following an increase of 14 percent.

Rents are most expensive in the south

According to Immowelt, however, tenants in southern Germany pay the highest prices. Many small cities in Baden-Württemberg have the highest asking prices. In Konstanz, the most expensive small city, the price per square meter is €13.60 following an increase of five percent last year.

Sindelfingen, which is in second place in the ranking at €12.60, had the same rental price rise. Behind it follows Ludwigsburg, Büblingen and Tübingen - cities in the southwest of Germany.

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Tenants in the east pay the least

According to Immowelt, tenants live cheapest in eastern Germany - but, even there, rents are steadily rising. Plauen in Saxony, with a median asking rent of €4.80, is the only small city still below the five-euro mark.

According to the survey, however, rents in the eastern German states are rising more moderately than in the others. In Neubrandenburg in Mecklenburg-Western Pomerania and in Zwickau in Saxony, rents increased by two percent. In Gera in Thuringia, they rose by four percent and in Cottbus in Brandenburg by five percent.

The reason for this is that many eastern German cities have a large number of vacant apartments as a result of population migration, which in some cases has been strong. Supply is therefore exceeding demand in many cases.

READ ALSO: A portrait of Cottbus, the German town that stopped accepting refugees

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