W.As home prices rise, the rise in rents is slowing. In 28 of the 50 most expensive cities, rents for newly concluded contracts fell in the third quarter compared to the second quarter. In the same period, new contract rents fell slightly overall by 0.9 percent on a nationwide average. In comparison to the third quarter of the previous year, asking rents rose nationwide by only 0.1 percent.
This is shown by figures that the consulting company F + B presented on Monday. The Hamburg-based company advises municipalities on setting up rent indexes. F + B managing director Bernd Leutner said: “On the national average, exorbitant rent increases are finally a thing of the past.” From the landlord’s point of view, the market is surprisingly robust and stable despite Corona.
The city of Munich remains the most expensive place despite a decrease in the average rent per square meter by 30 cents. According to F + B, a 75 square meter standard apartment at the age of ten costs 16 euros per square meter per month. In the southern Hessian metropolis of Frankfurt, new rents rose moderately by one percent in the third quarter compared to the previous year. In the banking city, a newly rented apartment costs an average of EUR 12.10 per square meter.
The consulting company F + B examined other areas of the housing market in addition to apartment rents. Overall, according to F + B, prices and rents for residential properties rose by 5.6 percent in the third quarter compared to the same period last year. Compared to the previous quarter, the combined F + B price index for rents and purchase prices rose by only 0.2 percent.
What is remarkable is the look at the home market segment, which according to F + B has dominated the price development. The prices for single and two-family houses rose in the third quarter by 8.6 percent compared to the previous year, while the prices for condominiums rose less strongly in the same period by 5.5 percent.
F + B managing director Bernd Leutner said: “We are of the opinion that the corona pandemic has generated an additional and apparently sustainable surge in demand here – with a limited supply at the same time.” These figures are based on adjusted supply data from over 30 million apartments and houses from one of the largest price and market databases in Germany according to F + B. The company corrects the offer prices based on experience and uses statistical methods for its estimates.
Retreat to the countryside?
The persistently strong demand for homes could have something to do with the corona pandemic, due to the fact that shifts with higher incomes are working more and more at home. This could benefit real estate on the outskirts of cities, which are more often homes than apartments. Those who can afford a car avoid local public transport, so that the proximity to stops and train stations takes a back seat when assessing the situation of a residential property. In addition, in view of lockdowns and impending exit restrictions, real estate buyers prefer larger living spaces, their own gardens and proximity to nature.
With a view to condominiums, F + B observed significant price increases in southern German municipalities, i.e. in Baden-Württemberg and Bavaria, and named Erding, Lindau am Bodensee, Landshut and Germering. Regional or local investors dominate there, for whom self-use and retirement provision are in the foreground. In the opinion of F + B managing director Leutner, this may also indicate demand preferences for smaller cities due to Corona, some of which are located in the vicinity of metropolises, but have a lower building density.