Financial expert warns: Rent prices explode by 20 percent in just one year

Financial expert warns: Rent prices explode by 20 percent in just one year

According to a report by www.hna.de, rental prices in Germany continue to rise. Prices for existing apartments rose by a national average of 5.8 percent in December 2023 compared to the previous year. Rents are rising drastically, especially in metropolises such as Munich and Berlin, with the average rental price per square meter in Munich already being 21.01 euros. At the same time, according to the Federal Statistical Office, real estate prices are falling, leading to a precarious situation.

The tenants' association warns of a serious social problem and calls for rents to be frozen for several years and for the construction of affordable housing, especially social housing. Studies by the Pestel Institute in Germany have shown that there is a shortage of over 900,000 social housing units, which is due to the severely neglected funding of such housing by the federal and state governments.

The sharp rise in rental prices and the lack of affordable housing are having a significant impact on the real estate market and the industry. This could lead to the displacement of low-income tenants from metropolitan areas and further increase social inequality. Additionally, continued rising rents could increase demand for property purchases as people look for stable housing situations. This, in turn, could lead to a rise in property prices and increased shortages.

It is clear that policy measures to create affordable housing and curb rent increases are urgently needed to ensure social stability and regulate the real estate market. The reports of rising rent prices and the lack of affordable housing should encourage all stakeholders at the political level to take action to address these problems.