German Rents Fall in August Halting RallyDalia Fahmy
Advertised rents in three of Germany’s five largest cities fell in August, indicating extended rallies in the country’s urban areas may be stalling, according to online broker Immobilien Scout GmbH.
Offered rents in Hamburg dropped by 0.6 percent in August from July, and in Cologne they fell by 0.4 percent, the second-consecutive drop for both cities. Munich fell 0.3 percent, its third decline in a row, while rents in Frankfurt were unchanged. Berlin was the only city among Germany’s five largest where rents rose.
“Whether this trend turns into a lasting development remains to be seen,” Michael Kiefer, Immobilien Scout’s head of valuations, said in a statement. “There seems to be a change of direction in some of the big cities.”
Berlin’s offered rents rose 0.4 percent in August from July, bucking the trend because rents there are still low compared with other cities, Kiefer said.
Housing costs in Germany’s largest cities have jumped in the past five years as young people move to areas where jobs are easier to find and construction fails to keep up with demand. Legislators are tightening rent regulations and politicians are promising to introduce rules to keep rents and prices in check.
State governments in cities including Hamburg, Berlin and Munich plan to prohibit increasing rents by more than 15 percent in certain neighborhoods over a three-year period, officials said in April. The initiative follows passage of a national law in December that makes it easier for cities that face a housing shortage to cap rents.
Advertised rents in Germany’s five largest cities have gained about 12 percent in the past five years, according to Immobilien Scout.