Experts warn of further increases in rent prices: Rents are rising not only in large cities, but also in the surrounding areas and in the countryside.

Experts warn of further increases in rent prices: Rents are rising not only in large cities, but also in the surrounding areas and in the countryside.

According to a report from www.stern.de, rents are also rising sharply in the surrounding areas of cities and in rural areas in Germany. According to a study by the German Economic Institute (IW Cologne), new contract rents across Germany have recently increased by 5.3 percent. The price increases were particularly strong in metropolises such as Berlin, Leipzig and Munich. Rents in the areas surrounding the largest cities and in rural areas rose by an average of 5.5 percent and 5.2 percent, respectively. Interestingly, purchase prices for real estate have fallen slightly since the interest rate turnaround at the beginning of 2022, but according to the IW analysis they are now bottoming out and rising slightly again.

The rising rents and the development of purchase prices for real estate have various effects on the market and the financial sector. Rising rents can mean that more and more people are having difficulty finding affordable housing. In the long term, this can lead to social problems and increased demand for government support. At the same time, rising purchase prices for real estate could mean that fewer people are able to purchase home ownership, which in turn could further increase the demand for rental apartments.

In addition, rising rents and property prices could have an impact on the financial market. Banks and other financial institutions that invest in mortgage-backed loans must consider the increasing risks that may accompany increasing defaults associated with rent or mortgage payments.

Overall, it can be said that the current developments on the real estate market in Germany bring with them many challenges. It is important that governments, companies and financial institutions monitor these developments closely and consider possible measures to stabilize the market.