A recent study by the German Institute for Economic Affairs (IW) has shed light on the prevalence of index-linked rent contracts in Germany. According to the investigation, only a small percentage of rent agreements, 2.6%, in the year 2024 featured an index-linked rent contract, a slight increase from 2.1% in 2022 and 2.3% in 2023.
The majority of rent contracts, 92%, remained the traditional, open-ended agreement, allowing for rent increases up to the local market rate. The analysis is based on data from a panel of over 5,000 participating renters.
Index-linked rent contracts were more common in new builds, with nine percent of such agreements featuring this type of contract. A notable increase in index-linked rent contracts was observed in the seven largest German cities, with 4.1% of agreements featuring this type of contract in 2024.
In new builds in these major cities, index-linked rent contracts were the most prevalent, with 18.8% of cases featuring this type of contract in 2024. Index-linked rent contracts tie the rent to the rate of inflation, making it one of the first nationwide studies to investigate the spread of this type of agreement.