Rents in Germany are rising unstoppably

According to the latest data from the Federal Statistical Office in Wiesbaden, 1.5 million households in Germany spent more than 50 percent of their net income on rent last year, excluding utilities. In addition, 1.6 million households spent between 40 and 50 percent of their income on rent.

This, as the statisticians concluded, means that 3.1 million households in Germany are heavily burdened with housing costs above average.

The poor are most affected

The average percentage that 19.9 million households set aside for rent is 27.8 percent. The statistics do not show precisely whether it is middle-income citizens who allocate an above-average amount for expensive real estate or lower-income citizens who live in averagely expensive real estate. Experts, however, start from the fact that in most cases it is about citizens with lower incomes.

"The financial burden of households with lower incomes is dramatically expressed in larger cities," said Sebastian Dullien from the Institute for Macroeconomics and Economic Growth Research (IMK).

He believes that it is an alarming fact that in recent years the percentage of citizens who set aside a large part of their income for housing has increased.

The situation with apartments could further deteriorate

Experts also have bad news for tenants: the situation on the real estate market, especially in larger cities, is not in sight. The main reason for the increase in rent prices in recent years was the rapid growth in the purchase prices of real estate.

In the meantime, price growth has stopped, but, according to experts, tenants will not profit from it. The cause is reduced activity in the housing sector with a simultaneous increase in demand.

"To that should be added the increase in interest on loans, which means that many who planned to do so will not be able to afford to buy an apartment. These people will remain on the real estate market for rent, which increases demand, and thus prices," said Stephan Kippes from Association of real estate dealers for the south of Germany.

He predicts that the problem with the lack of apartments, especially those that the average worker can afford, will grow, writes Deutsche Welle (DW).

Tržište nekretnine, 09. Apr. 2023.