Expert: Rents will continue to rise next year
The real estate boom in Germany is over, say experts. Purchase prices are crumbling due to higher interest rates and expensive building materials. On the other hand, rents are rising sharply. The housing situation is likely to become tighter in the coming year.
In view of the housing shortage and high immigration, experts expect rents in Germany to continue to rise significantly in 2024. Property prices, on the other hand, are likely to continue to fall, with properties with a poor energy balance under particular pressure.
"We expect political uncertainty to remain high in 2024 and see little scope for stimulus in new residential construction," said Roman Heidrich, expert for residential property valuations at real estate specialist Jones Lang LaSalle (JLL). The excess demand for rental apartments in particular will become even more acute.
In the third quarter, rents in the eight largest metropolitan areas in Germany climbed by 8.4 percent compared to the same period last year, according to new data from JLL. The second quarter saw an increase of 3.8 percent. Rents also rose sharply year-on-year in other major cities - for example in Mannheim (5.7 percent), Bonn (4.8 percent), Essen (5.2 percent) and Wuppertal (5.7 percent). The increases were greater than in other urban areas and in rural areas, where rents rose by a good 4% year-on-year and less than 2% compared to the previous quarter.
High demand, but little supply
"We assume that rents will continue to rise in the medium and long term, as demand in most regions of Germany will continue to significantly exceed the shrinking supply of new apartments in the coming years," said Heidrich. In contrast, experts expect purchase prices to continue to fall. The significant rise in interest rates is not yet likely to be fully reflected in prices for private residential property, said JLL expert Heidrich.
Since mid-2022 - the peak of the real estate boom - residential properties have become a good seven percent cheaper, according to a study by DZ Bank. According to their assessment, the correction is likely to slow down over the course of 2024 and end as interest rates fall. However, it still expects prices to fall by 0.5 to 2.5 percent on average over the year. Properties in poor locations or with high energy consumption are likely to perform less well.
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Source: www.ntv.de
