- Analysis reveals: Urban area housing markets exhibiting stagnation
In major urban areas of Germany, as per a research by real estate titan JLL, the rental housing sector is finding itself in a downward spiral and functioning less efficiently. This is due to the escalating disparity between current rents and new listings, causing tenants to shun relocations as they'd end up paying significantly more in a fresh apartment, according to the study.
Consequently, the already limited inventory shrinks further since fewer properties enter the market. This subsequently boosts 'new lease rents', intensifying the predicament for home hunters. The actual need for housing might consequently be exaggerated.
JLL has pinpointed significant disparities between new lease and existing rents in Munich and Berlin. Relocating to these cities is especially costly, with the rent in the new lease averaging around 8 or 7.50 euros more per square meter compared to the old apartment. Frankfurt ranks second with a price difference of 4.80 euros per square meter. Dresden and Duisburg, however, present less expensive options with a difference of just around 1.50 euros, making relocations seem more viable.
Besides boosting supply via new construction, Roman Heidrich, JLL's manager, suggests stimulating turnover as well. Swap possibilities could potentially contribute to this. Additionally, it's worth considering regulatory measures to swiftly align existing rents with the market rate.
The real estate market in major urban areas like Munich and Berlin, as indicated by JLL's research, is experiencing a substantial disparity between new lease rents and existing rents. This disparity is making relocations within these cities financially burdensome for tenants.
Given the current state of the real estate market, increasing turnover by promoting swap possibilities could help bring existing rents closer to the market rate, as suggested by Roman Heidrich from JLL.
