According to a study by the Cologne Institute of the German Economy (IW), it is becoming increasingly difficult to find rental apartments in major German cities. In the first quarter of 2024, there were 27% fewer rental apartments available compared to early 2022 in the seven largest cities.
The demand remains high, leading to a worsening housing market situation. Nationally, there has been an 18% decrease in the number of apartments listed for rent compared to two years ago.
The decline in areas outside of the seven major cities was noticeably lower at 10%. Leipzig experienced the largest decrease, with the number of available apartments halving.
Consequently, due to the limited supply, rental prices have increased by 1.4% in the second quarter for newly rented apartments. The IW's housing index indicates an annual rental price increase of over 5% in 2023 and 2024 compared to the previous year.
The researchers also noted that those seeking to buy a home have a better chance as the supply of condos for sale has increased by two-thirds, and the number of single or two-family houses for sale has doubled.
However, the demand for buying homes remains restrained due to high purchase prices and expensive financing. The IW suggests that affordable housing should be a priority and calls for targeted government support.
In addition, the construction of new homes, especially in urban areas, is seen as part of the solution.
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