Rental price index in Germany will rise sharply in 2023 - does the construction industry have a solution?

Rental price index in Germany will rise sharply in 2023 - does the construction industry have a solution?

According to a report by www.hna.de, rents in Germany continued to rise. The construction industry is in a deep crisis and cannot counteract the sharp increase in demand.

The increased demand for rental apartments in major cities continues to drive up rental prices. The analysis by the private research institute Empirica shows that metropolises such as Munich, Berlin and Frankfurt are among the most expensive rental markets in Germany. The high demand is reinforced by a growing group of people who cannot afford to buy a home, particularly due to the high cost of loans caused by the European Central Bank's increase in key interest rates.

The construction industry is in crisis, which means that the supply of rental apartments cannot keep up with demand. The high construction prices, increased interest rates and the loss of confidence among investors have led to a decline in building permits. The Central Association of the German Construction Industry describes housing construction as a problem child and warns of a long-term worsening of the housing shortage if the decline in the construction industry continues.

The increased demand and the crisis in the construction industry are leading to a shortage of rental apartments and a further increase in prices. In the long term, this could lead to social inequality and increased pressure on the housing market.

Overall, it is expected that the situation on the rental housing market will remain tense and that rental prices in cities will continue to rise if no measures are taken to strengthen the housing market.