Data from the Berlin-based research institute Empirica reveals a significant surge in advertised rental prices across Germany since the beginning of 2022, averaging an increase of 18.3%. The findings, reported by “Der Spiegel” highlight a complex interplay of economic factors contributing to the rising cost of housing.
The primary catalyst for this increase is the series of interest rate hikes implemented by the European Central Bank (ECB) beginning in 2022. These measures were intended to curb the substantial inflation that arose following the onset of the conflict in Ukraine. Simultaneously, rising construction loan interest rates prompted many residential development firms to halt or postpone their projects, severely limiting the supply of new housing. This constrained supply coincided with increased demand, driven by individuals who were unable to secure homeownership due to financing difficulties and the influx of over one million Ukrainian refugees requiring accommodation.
Berlin has experienced particularly dramatic rent increases, witnessing a 42% rise since 2022. Advertised rents now average €14.90 per square meter, a considerably higher rate than in cities like Munich or Hamburg. The disparity between advertised rents and local comparison rents in Berlin is also notably larger than in other major urban centers. In 2024, the local comparison rate stood at a modest €7.21 per square meter, signifying that advertised rents are more than double that figure.
Berlin’s Senator for Urban Development, Building and Housing, Christian Gaebler, recently described the situation as creating a “divided housing market” acknowledging a stark contrast between those who already possess stable housing with moderate rents and those seeking accommodation facing exorbitant price tags.
The impact of this rental boom is not limited to major cities. Medium-sized towns and rural areas are also experiencing a significant rise in rents. The district of Kaiserslautern has seen the second largest increase, with rents soaring 41.7% since the beginning of 2022. Closely following are Cottbus (41.3%), the district of Tirschenreuth (32.3%) and Brandenburg an der Havel (33.2%). The unexpected rise in these regions suggests a trend of individuals being priced out of larger urban centers and seeking more affordable options elsewhere.