Published by Rents in Germany have been stagnating for years.
The high rents and extreme price increases in the housing sector are one of the major stimulants in recent years. At the turn of the year 2018 / 19 a special law was passed, which tightened the rent brake and the rent increase should brake even better than before. The SPD propagates one Rent-stop, Berlin discusses expropriations, and so on.
If you ask statisticians, you hunt phantoms here. The rental trend is below the average rate of inflation, so sustainable that you had to reduce the share of the basket of the consumption price index currently in order to avoid distortions. You can find the background paper on the revision of the CPI Consumer Price Index here.
It is difficult, of course, to explain this to people after years of pestering landlords. The "world" asks if you can believe that, the "financial market world" finds it "incomprehensible", Most of the leaves prefer to mention it not at all or only casually on the edge, such as the Berliner Zeitung, the Berliner Morgenpost or the Westfälische Rundschau.
What exactly is the calculation?
The background is that two-thirds of the German rented housing stock is in the hands of private small-scale tenants. These increase rarely, and if, then more moderately, since 2015 on average by 4%. That's 1,4% per year. The remaining third is in the hands of housing companies, which are increasing their existing rents, with an average of 5% to 6% over the 4 years, but also moderately. For details, see the above background paper pages 14 to 16.
On the other hand, the major price increases take place during the first-time letting of new buildings and, to a lesser extent, tenant changes, especially in the seven major German cities. In this sub-segment, prices in 2018 increased by 11%. However, 2018 only had new buildings in 240.000 in Germany, which corresponds to just over half a percent of the market for a total housing stock of 41 Mio. In addition, a large proportion of this number is attributable to condominiums, which are not all rented out. In view of the enormously tightened energy requirements in recent years for new construction and as a result of the massively increased construction prices, it is no wonder that new building, when it is rented, is more expensive. If you move into something like that, you usually have a high level of living comfort and comparatively low energy costs. Outside the new building, there was a tenant change in every tenth apartment in 2018, where rents were also frequently rebooked at higher prices.
The rest is mathematics. If 2018 re-lets and re-lets prices were 11% higher than 2017, which was a fraction of (10% re-let plus less than half a percent of new lettings =) just over 10% of the housing market as a whole, then that means a price-driving effect of say 1,1%.
Why does it feel different?
Conclusion: rents in Germany actually do not really rise, but have been stagnating for years below the inflation level. Only with new building or new letting there were noticeable price developments. When the press is talking about high rents, priceless apartments and high percentage price increases in the housing market, it means only this. This is not relevant for the majority of German tenants. If this feels different in public perception, it is based on a selective selection of data in the case of relevant press reports, evaluations or investigations, see the above background note on page 18.
Of course, these facts challenge politics, but that's another topic.
Book Recommendation