rents

The empirica housing market index is available up to Q3/2024. In the current quarter, asking prices for new builds continued to rise. Purchase prices for existing properties remained stable. The increase in rents also remained, but weakened somewhat compared to the previous quarter.

The current sharp rise in rents contrasts with the moderate increase in purchase prices. This is positive for the risk of a bubble, as the high valuation level of property is increasingly justified. At the same time, the slight fall in interest rates is leading to an increase in new lending for residential construction, which in turn harbours the potential for further price rises and thus increases the risk of a bubble.

Purchase prices generally appear to have bottomed out and are falling more slowly than before or are already rising slightly. However, there are no uniform trends, as there are still major differences depending on the segment or region. In general, purchase prices for new builds tend to rise more than for existing properties, for condominiums (ETW) more than for single-family homes and in urban regions more than in federal states.

The purchase prices in the empirica property price index for Q1/2024 indicate that the bottom has been reached. This is shown by the new data from the empirica property price index for Q1/2024. While new construction prices continue to show a stable trend, purchase prices across all years of construction should now also have reached a stable level. The first increases can already be observed across all years of construction in cities with a rather low purchase price level.

Net rents in major German cities (A-cities) are 70 per cent more expensive than 13 years ago. The rent burden for low-income households is 31 per cent across Germany. And: the development of rents is dependent on the development of incomes, particularly in the south. These are the key findings of a new study by economic and property data provider empirica regio GmbH. Our conclusion: The housing market is facing major challenges. The demand for new and affordable housing in Germany continues to grow. And: those who can, will stay in their own home.

The data from the empirica real estate price index for Q4/2024 is here. One of the results: The trend of rising rental prices continues. For new apartments, the rental prices have increased by 1.3% in the independent cities compared to the third quarter of 2023, and by 1.4% in the districts. The indices for rental apartments of all years of construction recorded an increase of 1.3%.

The empirica housing bubble index indicates that the risk of a housing market bubble in Germany is decreasing. In recent quarters, there has been a change: there are fewer and fewer vulnerable districts. The danger is still there, but its extent is getting smaller. The number of endangered regions has been falling for three quarters in a row.

The empirica housing price index continues to show a trend of declining purchase prices for condominiums and single- or two-family houses, while the indices for rental apartments continue to rise. For newly built condominiums, the indices stabilize with an increase of 0.2% compared to the previous quarter. In contrast, the indices for newly built detached and semi-detached houses continue to decline (-0.9%). The increase in newly built rental apartments amounts to 1.2% this quarter.

The last few quarters have shown a noteworthy development on the real estate market. The indices for owner-occupied flats and detached or semi-detached houses have already fallen for the fourth quarter in a row, while rented flats recorded an increase of 1.1% compared to the previous quarter.

With Q3/2022, the indices for condominiums as well as detached and semi-detached houses declined on average nationwide for the first time since 2013. In Q4/2022, this new trend continues, with observed purchase prices now falling both in new construction and across all construction years, and in many regions in Germany.

In the observation of advertised purchase prices, Q3/2022 saw a break in the trend that had already become apparent in Q2. On a nationwide average across all properties, the indices of condominiums and detached and semi-detached houses recorded a decline for the first time since 2013.

With growth of 1.1 % compared to the previous quarter, purchase prices for condominiums rose less strongly than rents (+2.0 %) for the first time in a long time. Purchase prices for detached and semi-detached houses rose by 2.5 % compared to the last quarter.

Singles and large families pay the highest rents per square metre in Germany. This is the key finding of a recent analysis by empirica regio GmbH. Especially in the large cities and major cities, the so-called A-cities, families have to spend more than others on rent.

We have written this sentence in this or similar form many times in recent quarters: The indices for the rental, condominium and detached and semi-detached house sub-segments continued to rise in Q1/2022. The relative increase in advertised rents, at 1.2% compared to the last quarter, continued to lag well behind the development of purchase prices. Prices for condominiums rose by 2.4% compared to Q4, prices for detached and semi-detached houses even by 3.1% compared to the last quarter.

The indices for the rental, condominium and detached and semi-detached house sub-segments continued to rise in Q4/2021. The relative increase in advertised rents, at 1.2% on the last quarter and 5.8% on the same quarter of the previous year, continued to lag well behind the development of purchase prices. Prices for condominiums rose by 2.9% compared to Q3, prices for detached and semi-detached houses even by 3.1% compared to the last quarter.

The empirica property price index for Q3 2021 is available just in time for EXPO REAL. The rise in rents in the swarm cities is easing somewhat. In the surrounding regions and some rural areas, on the other hand, rents are rising even more strongly, albeit from a lower starting level. A look at the following map shows the development of the last three years at district level for rents (all construction years).

The empirica housing price index continues to show rising prices, especially in the condominium segment (+3.2% quarter-on-quarter) and detached and semi-detached houses for sale (+2.9% quarter-on-quarter).

The current empirica housing price index for Q1/2021 is available. The relative development continues as in the previous quarters: rents continue to rise, albeit slowly, and purchase prices continue to increase strongly.

The empirica housing price index with current rents and purchase prices for the 4th quarter of 2020 and the CBRE-empirica-Vacancy-Index 2020 are available.

The current empirica property price index for Q3/2020 is now available. The indices for rented and owner-occupied flats as well as single and two-family houses continue to rise across all construction years.

The current empirica real estate price index shows: Rents and purchase prices in Germany continue to rise. The rates of increase in purchase prices are still significantly higher than the growth in rents.

empirica regio has prepared a special evaluation of offered rents from early 2019 to mid May 2020 for an article on the Berlin rent cap by ZEIT ONLINE.

Initial Situation Before the Corona Crisis In recent quarters, purchase prices in Germany have continued to rise, while rents in many core cities rose less strongly than before or even stagnated.

What slowly became apparent in the last months is continuing: the rise in rents is continuing to slow down, especially in the metropolitan areas.

The empirica real estate price index for the fourth quarter of 2019 is now available. The rise in purchase prices continues.

For ZEIT ONLINE empirica regio has prepared a comprehensive analysis of rents between 2012 and 2018. The evaluation was published by ZEIT ONLINE as analysis with interactive maps and is part of the focus topic “Mieten am Limit”.

Translated by Jan Grade Background In 2015 the so-called rent brake was introduced in some federal states in Germany. The aim of the initiative was to curb the price increase of newly contracted rents in prospering cities so that housing in these cities remains affordable even for middle and low-income households. At least that is how the draft law on the corresponding amendment to the tenancy law should be understood. ZEIT ONLINE has asked empirica regio to investigate the price development of newly advertised rental flats since the introduction of the rent brake in selected cities. However, the following evaluation is not a comprehensive study of the effects of the rent brake, but only an ad-hoc evaluation of the supply rents of individual cities.

The rents and purchase prices for the third quarter of 2019 from the empirica real estate price index are available.

New rents and purchase prices for the second quarter of 2019 from the empirica price database are now available for download.

Purchase prices continue to rise faster than rents. Condominiums increased by 2.4% compared to the previous quarter.