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According to BNP Paribas Real Estate, the imbalance between high demand and limited supply is the key factor behind the situation.
Severe housing shortage. The national vacancy rate is just 2.5%, and in the seven largest cities it has fallen below 1%. In Munich and Frankfurt, it has reached a record low of 0.1%. Such scarcity puts heavy pressure on the market and inevitably pushes prices upward.
Construction crisis. Low construction activity, combined with population growth—particularly in major cities—exacerbates the problem. In the short and medium term, this imbalance is likely to persist.
Strong demand. Consistently high demand for housing, especially in Class-A cities (A-Städten) and university hubs, prevents the market from stabilizing.
Price growth has affected all regions, but the sharpest increases are seen in major cities. In Berlin, asking rents for existing housing have risen by 87% since 2015, making it the national leader. In the new-build segment, the highest growth has also been recorded in Berlin and Hamburg — up 72% since 2015.
Hamburg, with new-build rents at €22.40 per square meter, now ranks as the second most expensive market after Munich. Nationwide, rents for new apartments have increased by 55% compared to 2015 and currently average €14.65 per square meter.
According to Christoph Meselinski, Managing Director at BNP Paribas Real Estate, investments in rental housing remain attractive due to the stable cash flow they generate. However, for tenants this means they will face continued rent increases in the coming years. The report’s authors are confident that, given the current balance of supply and demand, dynamic rental growth will persist.
Source: Haufe.de
