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Residential Property in German Cities: Purchase Prices to Continue Rising Faster than Rents in 2014

Press Release of December 5, 2013

Since 2010, housing prices in Germany have been growing on average by 6 percent a year. During the same period, the rents have been increasing by 4 percent, which is significantly slower than the housing prices, but substantially faster than the consumer prices. This is one of the results of the DIW Berlin study that examines the housing price dynamics in 71 large German cities. The largest rent increases can be observed in Berlin (8 percent); in Hamburg and Munich the rents have been increasing on average by 4 to 4.5 percent a year. Much lower housing rent growth rates are found in Ruhr area; Gelsenkirchen faced even a 1 percent rent decline. The trend of generally increasing housing prices and rents will continue in the nearest future, too. By the third quarter 2014, the housing prices are expected to go up by 6.5 percent, whereas the rents are predicted to increase by 3.5 percent.