Rents in Germany have recently risen significantly – especially in large cities, a square meter often costs more than 20 euros. And purchase prices could also rise again in the coming months.
Rental prices in major German cities have recently risen to a new record level. According to a current study by the online platform ImmoScout24, rental prices for existing rental apartments rose by 1.6 percent across Germany in the fourth quarter of 2023 compared to the previous quarter. Compared to the same period last year, prices increased by 5.8 percent.
Asking rents also rose for newly built apartments: 1.4 percent more were charged compared to the third quarter of 2023, and asking rents even rose by 7.7 percent compared to the same period last year. According to ImmoScout24, the price per square meter in the fourth quarter of 2023 was 8.42 euros for existing buildings and 11.72 euros for new buildings.
Most tense Rental market in Berlin
Although demand for rental apartments has fallen slightly, it remains at a high level, particularly in the eight largest German cities. “New price records show how tense the rental market in major cities continues to be,” said the managing director of ImmoScout24, Gesa Crockford. This particularly applies to new buildings. “In Munich you pay an average of 24 euros per square meter,” said Crockford. Offer prices also rose by double-digit percentages in Stuttgart (+14.6 percent) and Cologne (+14.1 percent).
However, Berlin remains the most tense rental market in Germany: “New apartments in Berlin are 20 percent more expensive than a year ago.” The price per square meter here is now 19.45 euros. When looking for a new apartment, people increasingly looked outside the metropolises. “There you will find a larger selection and cheaper rents,” said Crockford.
Purchase prices could rise significantly
The experts at ImmoScout24 recently registered an upswing on the purchase market after a year characterized by rather restraint. There was a clear upward trend in asking prices for new apartments in the fourth quarter. The trend is also positive for existing properties. “There are only occasional price reductions,” it said.
In the fourth quarter, new condominiums across Germany rose in price by an average of 2.4 percent compared to the same period last year, and new houses even rose by 2.9 percent. However, there were still slight declines in the inventory – 1.6 percent for condominiums and 0.5 percent for houses. “In view of the lower inflation rate and the interest rate situation becoming more stable again, a certain degree of planning security and thus purchasing demand are increasingly returning,” said Crockford.
The comparison portal immowelt is also observing a similar development: “After one and a half challenging years for the entire real estate industry, we are confident about the year 2024. Building interest rates seem to have already passed their peak and are currently falling,” says immowelt managing director Felix Kusch. After that, real estate prices will likely soon reach their lowest point.