• Rent dynamics only in line with the inflation rate
• Construction completion figures have increased significantly since 2018
Federal Interior Minister Horst Seehofer will take stock of his building and housing policy in the Federal Cabinet today. The focus is likely to be on new building activity, which is causing a noticeable decline in the dynamics of nationwide asking rents. Declining rent increases can also be seen in the 14 large cities, as a current analysis by the Real Estate Association Germany IVD showed.
IVD Research compared nationwide price data and data from 14 large cities from the Federal Statistical Office (Destatis), the Federal Office for Building and Regional Planning (BBSR), the independent research institute F + B and its own data. The result: Since 2018, rents have increased in some cases much more slowly than in previous years. This is a trend that all institutes are seeing. Throughout Germany, the F + B institute reported moderate growth in existing rents of 1.4 percent and 1.2 percent respectively for 2019 and 2020. The trend is in line with the rental index (existing, new and re-letting) from Destatis and the data from the IVD experts. IVD Research determined a rent increase of 2.6 percent for existing apartments (new contract rents) in 2020. In 2017, rents had increased by 3.8 percent.
For IVD President Jürgen Michael Schick the picture is clear: “The media and political representation of rent increases in Germany largely ignores reality. In the past few years there has been a sharp decline in rent growth in line with the inflation rate, a clear consequence of the increased efforts to build new buildings. The IVD expects this trend to continue. “