Housing: Housing shortage: Rents in Germany rise significantly
For tenants, there is hardly any respite: their living costs are rising sharply. Property prices are also going up. However, the regional differences are significant.
Mieten in Germany are significantly rising due to a shortage of housing. According to data from the German Association of Pfandbrief Banks (VDP), new contracts for multiple-family housing in the second quarter rose by 3.2 percent compared to the same period last year. However, the pressure has slightly decreased compared to the previous quarters, according to the association, which consists of around 50 real estate financiers, including Deutsche Bank, Commerzbank, and savings banks.
In the seven major cities, rents increased by 1.5 percent, which was significantly weaker than the nationwide average. Düsseldorf had the highest growth (3.6 percent), while Berlin's rents hardly increased (0.6 percent). Germany is estimated to be lacking around one million homes. At the same time, construction is often taking place in the countryside, while demand far exceeds supply in urban areas.
The VDP data is based on real contract signings from over 700 banks and is considered reliable. Not only rents but also real estate prices increased in the second quarter according to the VDP. Properties and houses rose by 1.9 percent compared to the previous year and by 0.3 percent compared to the first quarter. In the seven metropolises, real estate prices climbed by 2.1 percent within the year, somewhat stronger than nationwide.
Most noticeably, prices went up in Hamburg (3.8 percent), followed by Cologne (2.5 percent), Frankfurt and Düsseldorf (each 2.4 percent). Berlin and Stuttgart stood at 1.6 percent and 0.7 percent, respectively. The housing shortage drives up rents and prices, wrote the association. CEO Jens Tolckmitt praised the reforms of the federal government, which aim to speed up planning processes and reduce construction costs through the "construction turbo" and the simplified building type E: "The message that planning procedures should be drastically accelerated and deviation from excessive technical requirements is allowed is exactly what market players need."
Written by urgent.news from Handelsblatt's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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