The real estate boom is over and purchase prices are falling. But now the rents are rising, and they are going up. Both are closely related. But what happens next?
This force surprised many: rents in Berlin have recently increased by around 20 percent – within a single year. Over a five-year period, a square meter of rented accommodation in the capital has even risen by around 50 percent. This is shown by figures from the analysis companies Empirica and JLL. And in other major cities, too, prices for re-letting have risen significantly since 2018: in Leipzig and Cologne they have increased by around 28 percent, meaning that people moving there are now paying almost a third more for apartments than in 2018. In Hamburg it is 21 percent more, Munich and Düsseldorf increased by around 16 percent. In contrast, the increases in Frankfurt and Stuttgart (11 and 7 percent over a five-year period) seem almost small.
Nevertheless, it is now a sad certainty: the real estate market is gradually “normalizing” again. Yes, this movement is actually normal, as bad as the increase sounds and is for millions of tenants. All we have to do is review briefly what has happened in the past few years.
Source: Stern
