Rent rising rapidly: real estate market under pressure in Germany!

Rent rising rapidly: real estate market under pressure in Germany!

Rental prices in many German cities increase rapidly in 2024! According to an analysis by the German Institute for Economic Research (DIW), rents in the stock and new buildings have increased on average by about four percent. Since 2010, net rent rents has risen astronomically by 64 percent. In contrast, the purchase prices continued in 2024. Lands, homes and condominiums became five percent cheaper than in the previous year, although a price increase emerges. These developments show that the demand for living space remains strong due to a growing population, while the offer is declining what the real estate prices drives up, as the B.Z. reports.

strong offer bottlenecks

Another alarming fact: The vacancy rate has fallen to a historical low of an average of 2.5 percent since 2022, in large cities like Berlin it is only one percent! This shows that the housing market operates at a tense level. One reason for the price increase is the decline in credit rates, which has favored the purchase price increase since the center of the year. However, the DIW economists warn that despite the falling purchase prices, the shortage of housing is not solved. In 2023, fewer than 300,000 new apartments were built, and the forecasts for 2024 are not very optimistic.

Economist Rieth from Diw therefore calls for urgent measures from the new federal government. It is essential to intensify public construction activities and to simplify the procedures in order to counteract this crisis. In addition, possible speculative price bubbles in the real estate market should be analyzed more precisely so that market participants do not develop blindness to realistic housing conditions in the expectation of increasing price increases, such as the analysis of Diw