New apartment leases push up rents by 4.4%

New rental leases for apartments across Germany have pushed up rents by 4.4% year-on-year in the first six months of 2017 to €7.90 per sqm for the basic net rent, according to data published by the Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR) in August.

Cities with more than 500,000 inhabitants benefitted most from the increases, averaging upticks of 5.6% to €10.39 per sqm for both new and existing tenants. Large cities with fewer than 500,000 inhabitants witnessed smaller than average increases of 4%, or an average of €7.55 per sqm.

Districts surrounding large cities benefitted from average increases of 3.7% to €7.41 per sqm. Rural rents, for their part, increased by 3.4% to €6.03 per sqm.

Unsurprisingly, Munich’s new rental leases are the most expensive in the country at €16.40 per sqm, followed by Frankfurt (€12.95), Stuttgart (€12.44), Freiburg (€11.82), Ingolstadt (€11.21) and Hamburg (€11.02), according to the BBSR.

However, not all districts have fared as well. In Lüchow-Dannenberg and Wunsiedel in Lower Saxony and Bavaria, for example, typical apartments are fetching less than €4.40 per sqm.

‘The gap in rental rates in Germany is widening ever-further,’ said BBSR housing expert Matthias Waltersbacher.

(Rising rents in German cities, coupled with an overbuild in rural areas is exacerbating the problem to create a two-speed housing market, the Cologne Institute for Economic Research (IW) warned this month. See our story elsewhere in this issue)

Last year, new rental leases increased on average by 4.9% year-on-year to €7.65 per sqm, according to the BBSR.