Rising rents are putting a strain on big city tenants - which city is particularly affected.

Rising rents are putting a strain on big city tenants - which city is particularly affected.

According to a report by amp2.handelsblatt.com, In many metropolitan areas, tenants have to spend more than a third of their income on basic rent. One city in particular stands out. Low levels of new housing construction and high levels of influx have been putting the housing markets in large cities under pressure for years. According to the online portal Immoscout24, demand for existing apartments in major cities increased sharply in the third quarter of this year. However, there are signs that the rental price dynamics are weakening somewhat. In the seven largest cities, existing rents rose by an average of 0.7 percent from June to September - i.e. more slowly than in the previous quarter. In the long term, however, rents are likely to continue to rise in many places. At the end of last week, for example, the real estate group LEG, one of the largest apartment owners in Germany, announced that it would increase the rents of its apartments “as much as is legally possible”.

This information suggests that the rental market in major urban neighborhoods, particularly in metropolitan areas, is under severe pressure. The low level of new housing construction combined with a high influx of people is leading to strong demand for existing apartments, which is driving up rental prices. Although there are signs of a slowdown in rental price dynamics, rising rents can be expected in the long term. This can lead to a further burden on tenants, who already have to spend more than a third of their income on rent. In addition, the announcement by the real estate group LEG that it will increase rents “as much as regulatory possible” signals that the situation for tenants in the apartments managed by LEG could worsen.

Overall, it is likely that the tense rental market situation in large cities will continue and may even become worse if measures are not taken to promote housing construction and create affordable housing. This development could also have an impact on the real estate industry, as investors may continue to receive attractive returns from the rental market in major cities.