It is becoming increasingly difficult to find housing in Germany’s largest urban areas as rents for new tenants rise, a study published on Sunday found.
The mismatch between supply and demand had led to a dysfunctional market as a result of the widening gap between rents for established tenants and new tenants, real estate agency JLL discovered.
The research found that tenants stayed put to avoid paying higher rent for a new apartment, leading to a drop in supply in an already tight market.
This in turn led to further rent increases for new tenants, the report said, suggesting that actual demand may currently be overestimated.
JLL’s research found that, particularly in Munich and Berlin, there were large differences between existing and new leases, with tenants reluctant to move to new properties where rents were up to €8 ($9) higher per square metre.
They were followed by Frankfurt, where the difference was around €5. In contrast, moving in Duisburg in the Ruhr area and in Dresden in the east was much easier, with a difference of €1.50.
JLL CEO Roman Heidrich called for encouraging churn in the market, alongside new construction. Swaps could be promoted, along with steps to make it easier for existing rents to rise to market levels.
Parts of Germany are facing a severe housing crisis. According to official statistics published on Friday, 106,700 new homes came onto the market in the first half of this year, a 21% drop from the same period last year, which itself was seen as weak.
The situation is attributed to increased construction costs and high interest rates.
