The German Economic Institute (IW) revealed that rental prices for housing offered for rent in Germany rose by 4% in the second quarter of this year compared to the same period last year. The increases were recorded in some major German cities, with the rise reaching 4.9%.

The institute pointed out significant differences between cities, with rental prices in Cologne rising by 7.9%, in Hamburg by 5.5%, while the increases were much lower in Stuttgart at 0.9% and in Berlin at 1%.

Reduced Supply

Experts from the institute explained that the supply of rental housing has decreased significantly in many areas, as the number of real estate listings dropped by about 12% compared to the beginning of 2022. The decline was more pronounced in several major cities, with the supply in Hamburg falling to less than half, while the number of listings in Frankfurt decreased by 43%.

Real estate economist at the institute, Beka Zagner, said that the main reason for this is that many residents remain in homes that do not match their current needs, whether larger or smaller than necessary, for fear of losing the low-cost rental contracts they currently enjoy.

Interest Rates

In contrast, the situation appeared different in the property purchasing market, as prices rose at a limited pace, with prices for residential apartments and detached and semi-detached houses in Germany increasing by 0.8% each compared to the same quarter last year.

Prices also varied between cities, rising in Dortmund by 5%, while they fell in Munich by 1.9%.

The institute mentioned that the supply of properties for sale has significantly increased since the start of the interest rate hike cycle, as the number of listings for residential apartments for sale in Germany has nearly doubled compared to the first quarter of 2022, and the number of listings for detached and semi-detached houses has risen by about 140%.

The German Economic Institute "IW" revealed an increase in rental prices for residential properties in Germany during the second quarter of this year by 4% compared to the same period last year. The increases were recorded in some major German cities, with the rise reaching 4.9%.

The institute pointed out significant differences between cities, as rental prices in Cologne increased by 7.9%, in Hamburg by 5.5%, while the increases were much lower in Stuttgart at 0.9% and in Berlin at 1%.

Reduced Supply

Experts from the institute clarified that the supply of rental housing has significantly decreased in many areas, as the number of real estate listings dropped by about 12% compared to the beginning of 2022. The decline was more pronounced in several major cities, with the supply in Hamburg falling to less than half, while the number of listings in Frankfurt decreased by 43%.

Real estate economist at the institute, Beka Zagner, noted that the main reason for this is that many residents are staying in homes that do not match their current needs, whether they are larger or smaller than necessary, for fear of losing the low-cost rental contracts they enjoy.

Interest Rates

In contrast, the situation appeared different in the property purchasing market, as prices rose at a limited pace, with prices for residential apartments and detached and semi-detached houses in Germany increasing by 0.8% each compared to the same quarter last year.

Prices also varied between cities, rising in Dortmund by 5%, while they fell in Munich by 1.9%.

The institute mentioned that the supply of properties for sale has significantly increased since the start of the interest rate hike cycle, as the number of listings for residential apartments for sale in Germany has nearly doubled compared to the first quarter of 2022, and the number of listings for detached and semi-detached houses has risen by about 140%.