Rents on new contracts in German apartment buildings rose 3.2% year on year in the second quarter, according to figures from the Association of German Pfandbrief Banks (VDP), a trade group representing around 50 real-estate lenders including Deutsche Bank and Commerzbank, reported by DPA via Yahoo Finance. The VDP said the pace of increase has eased somewhat compared with recent quarters. In Germany’s seven major metropolitan areas, rents rose a considerably weaker 1.5%, with Düsseldorf recording the highest growth at 3.6% and Berlin rents barely moving at 0.6%.
Germany is estimated to be short of around one million homes, with construction often concentrated in rural areas while demand in urban centres continues to outstrip supply. The VDP’s figures are drawn from contracts concluded by more than 700 banks. Property prices also rose in the quarter: flats and houses became 1.9% more expensive year on year and 0.3% more expensive than the first quarter, with metropolitan-area property prices up 2.1% year on year.
VDP managing director Jens Tolckmitt said the housing shortage is driving rents and prices higher, while praising government reforms aimed at speeding up approvals and cutting construction costs through a fast-track building initiative. “The fact that planning procedures are to be drastically accelerated and that deviations from excessive technical requirements will be possible is exactly the right signal to all market participants,” Tolckmitt said.
References
DPA, via Yahoo Finance — German rents rise 3.2% in second quarter as housing shortage bites
