Federal government: Rise in asking rents slows

The tense situation on the housing markets in many cities and regions has improved since 2019, according to a report.

The reason: More will be built again.

Berlin - The rise in asking rents in Germany has slowed according to a recent report by the federal government.

"Since 2019 there has been a noticeable decrease in the dynamics of nationwide asking rents," says the draft of the fourth report on the housing and real estate industry in Germany, which the cabinet is due to adopt this Wednesday.

The paper is available to the German Press Agency in Berlin.

The online portal "The Pioneer" had previously reported on it.

The tense situation on the housing markets of many cities and regions that has been observed since 2012 has initially deteriorated further, according to the report.

In large cities in particular, the high demand for living space has led to rising rents.

Since 2019, however, the increase in nationwide asking rents has slowed noticeably, it is said. In large cities in particular, increased new building activity has a dampening effect on the increase in rents. According to the report, the housing markets have reacted to the high demand: The number of apartments completed in 2019 rose by two percent compared to 2018 to around 293,000. Compared to 2009, this corresponds to an increase of around 84 percent. An estimated 300,000 apartments were completed in 2020.

At the same time, the increase in asking rents for advertised apartments has decreased since 2019: in 2018, rents for re-letting rose by 5.4 percent compared to the previous year, by only 3.6 percent in 2019 and by 2.7 percent in 2020. Initial rental rents for newly built apartments also showed declining rates of increase: In 2019, initial rental rents rose by 7.6 percent compared to the previous year. The increase decreased to 5.4 percent in 2020. dpa