A fifth of German rental accomodation is now offered furnished

As everybody who's ever rented an apartment in German for anything other than a short stay knows, German apartments come empty. Like, really empty. Perhaps a lightbulb has been left by the previous owners, so that their successors can see what they're signing up for. But no kitchen, no fittings - just a series of plug sockets and plumbing attachments sticking out of painted white walls (they're always white).

The idea is that it is entirely up to you how you wish to create your ideal living environment - and to ensure that you leave it in exactly the same pristine condition when you yourself move on ten or fifteen years later. By which stage the expensive kitchen which you installed (along with those Billy bookcases from IKEA) is now probably broken up into a thousand pieces and is sitting out on the pavement awaiting the Sperrmüll collectors from the city's disposal unit to come and gather everything up and burn it in a massive waste incinerator in an ecologically sustainable way.

So we read with interest the latest research from Hamburg real estate research group F+B Forschung und Beratung GmbH, which shows that every fifth rental apartment in Germany is now offered furnished. This is a huge rise over the period examined in the researchers' study, from 2006 to 2020.

During this time, market rents for furnished units rose by 78.2% across Germany, while prices for unfurnished units only increased by 30.5%. In other words, rents for furnished units increased by a full 48 percentage points over those for unfurnished.

Despite a stagnation in the supply volume for furnished units, their share of the total rental housing market increased significantly: starting from 8.3% in 2014, the share rose to 18.3% in 2020. The evaluations for the first quarter of 2021 show that a further - moderate - increase can be expected this year.

In the top 8 cities (Berlin, Hamburg, Munich, Cologne, Frankfurt, Düsseldorf, Stuttgart, Leipzig), the share was still below 10% in 2007 and then rose to varying degrees. By 2020, the share of furnished flat of all apartments offered reached the smallest of the Top 8 in Leipzig with 9.5 % and the peak in Stuttgart with around 56 %.

The figures can be difficult to interpret. However, Dr. Bernd Leutner, CEO of F+B explains that the huge increase in market share for furnished apartments is not explained solely by the absolute rise in the number of furnished units on offer, but is also a consequence of the simultaneous decline in the number of unfurnished units offered - a decline triggered, among other things, by a lower relocation rate with a consequent decline in new rentals, as well as a change in marketing channels by owners at the expense of the real estate portals."

In cities where rents for unfurnished apartments rose sharply, rents for furnished flats also grew more strongly. The rent differential in the top 8 cities has increased from €1.20 /m² to €3.60 /m² (2006) to €5.40 /m² to €9.90 /m² (2020). In the cities where higher rent differences between furnished and unfurnished units can be found, the supply of furnished units has tended to expand more.

For 2021, rental growth is expected to continue, albeit at a slower pace. However, one phenomenon that the researchers point to is that the demand for furnished accommodation, according to landlords, is likely to have decreased due to Corona.

REFIRE: In some ways, none of this ought to be so surprising. The rigidity of the German private rental market for accomodation has been both a curse and a blessing - but it has largely been a curse for those not sure where they're physically going to be in three years time. The sheer expenditure on broker fees, furniture, and other expenses is horrendous for people (and not only those starting out) if - when - they find themselves in changed circumstances two years later.

All of this has led to the welcome arrival in Germany over the past ten years or so of a range of other living options - from co-living to micro-apartments to short-term boarding-house style furnished accomodation. The blessing, of course, has been the relatively low level of rent multiplied by the stability of tenants being able to view their apartment over many years as the equivalent of their own home, and where the rights and obligations of both landlord and tenant are spelt out in minute detail, for the legitimate protection of both.

The range and scope of living alternatives is certainly set to expand as Germany's big cities vie to become magnets for attracting young talent. COVID, Mietpreisbremse, Mietendeckel, and Flex Work are all phenomena that are likely to further shake up the German housing market.