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EXPLAINED: The small German cities where rents are rising the fastest

Throughout Germany, cities with between 50,000 and 100,000 residents are seeing a spike in demand for flat rentals. A new study shows how much prices are in turn rising - and where bargain hunters can still find a good deal.

Published: 6 March 2023 16:58 CET
Updated: 12 March 2023 06:15 CET
Hameln
Hameln, Lower Saxony, pictured in summer 2022. Rents continue to grow in this medium-sized city. Photo: picture alliance/dpa | Moritz Frankenberg

Rents in small cities rose by up to 18 percent last year, according to an evaluation by Immowelt. The real estate portal analysed existing flats, ranging in size between 40 to 120 square metres, and in cities with 50,000 to 100,000 inhabitants.

According to the report, asking prices for rents rose in 99 of the 110 evaluated cities. In 13 of these, the increase stood in the double-digit percentage range.

By comparison: in 2021, prices had risen in 90 small cities, and of these, only in six cities by more than ten percent.

READ ALSO: EXPLAINED: The German cities where rents are rising fastest this year

Demand is higher than supply

According to Immowelt, there are several reasons behind the rising rents. Many high-priced, small cities are located close to large cities, where rents are even higher. They provide easy access for commuters or weekend trips, while often offering more spacious rentals in quieter neighbourhoods.

In addition, there is a housing shortage in high-priced medium-sized cities, which means that demand is higher than supply.

Pressure on the rental market

At the same time, according to Immowelt, interest in rental flats has continued to increase over the past year. Demand, measured by inquiries per property, increased by 137 percent year-on-year, according to the report.

The Rheintorturm in Konstanz, the most expensive medium-sized cities for renters. By JoachimKohlerBremen – Own work, CC BY-SA 4.0

The fact that fewer and fewer people are able to buy their own homes due to the rise in construction interest rates is further upping the pressure on the rental market. The high amount of immigration to Germany has also aggravated the housing shortage, wrote Immowelt. 

Largest increases in North Rhine-Westphalia and Lower Saxony

According to Immowelt, the highest increases were recorded in small cities in North Rhine-Westphalia and Lower Saxony. In Dormagen in North Rhine-Westphalia, median asking rents climbed from €8 to €9.40 within a year. 

That corresponds to a plus of 18 percent. The city’s location between Düsseldorf and Cologne makes it particularly attractive for commuters who want to avoid the high rents of the big cities.

In Hameln in Lower Saxony, tenants also have to pay significantly more than a year ago: following an increase of 17 percent, median asking rents there are currently €7 euros per square meter. 

In Delmenhorst, west of Bremen, apartments are currently on offer for €8 per square metre following an increase of 14 percent.

Rents are most expensive in the south

According to Immowelt, however, tenants in southern Germany pay the highest prices. Many small cities in Baden-Württemberg have the highest asking prices. In Konstanz, the most expensive small city, the price per square meter is €13.60 following an increase of five percent last year.

Sindelfingen, which is in second place in the ranking at €12.60, had the same rental price rise. Behind it follows Ludwigsburg, Büblingen and Tübingen – cities in the southwest of Germany.

READ ALSO: Weekend Wanderlust: Medieval charm and Maultaschen in Tübingen

Tenants in the east pay the least

According to Immowelt, tenants live cheapest in eastern Germany – but, even there, rents are steadily rising. Plauen in Saxony, with a median asking rent of €4.80, is the only small city still below the five-euro mark.

According to the survey, however, rents in the eastern German states are rising more moderately than in the others. In Neubrandenburg in Mecklenburg-Western Pomerania and in Zwickau in Saxony, rents increased by two percent. In Gera in Thuringia, they rose by four percent and in Cottbus in Brandenburg by five percent.

The reason for this is that many eastern German cities have a large number of vacant apartments as a result of population migration, which in some cases has been strong. Supply is therefore exceeding demand in many cases.

READ ALSO: A portrait of Cottbus, the German town that stopped accepting refugees

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READER INSIGHTS

How foreign residents in Germany are winning rent reductions

Rent is often the biggest expense for foreign residents in Germany. Even though there are rent controls in some cities, tenants can still be charged too much. Readers shared how they managed to get a rent reduction.

Published: 2 May 2024 14:57 CEST
How foreign residents in Germany are winning rent reductions

The Local asked readers whether they have tried to reduce their rents in Germany, and to what end. 

Of the readers who responded, nearly half said they had never tried to reduce their rent. Among the other half of respondents, many said they either wanted to reduce their rent or were currently in the process of trying to have it reduced. 

About 18 percent of respondents to our survey said they had successfully reduced their rents in Germany before.

Why do residents want rent reductions?

Germany notoriously has the lowest rate of home ownership in Europe, which has long been attributed to being a country with high real estate prices and relatively low rents.

But this means that a large number of German residents are directly affected by rising rents. Low-income individuals living in urban hubs where rents have been rising rapidly in recent years are particularly vulnerable.

According to Germany’s statistical office (Destatis), 11.8 percent of the population was overburdened by housing costs as of 2022 – meaning these households spent more than 40 percent of their income on housing.

Unsurprisingly, a number of readers cited inflation and cost-of-living increases as the primary reason they wanted to try for a rent reduction.

READ ALSO: How to grow your savings in Germany during high inflation

A couple of readers noted that their current rent prices are making their living costs too high.

Rothe, 29, who lives in Aachen, says she can’t bear her current rent but is stuck in a contract.

Similarly, Lucas, 35, who lives in Horb am Neckar said he wants to reduce his rent to balance his expenses following the recent cost-of-living hikes. He says he’s tried to negotiate with his landlord, who doesn’t care to do so.

While landlords are unlikely to grant a rent reduction based on inflation or cost-of-living increases, there are a few reasons you can legitimately demand a rent reduction in Germany.

Make sure your rent isn’t exceeding the price brake limit

The rent price brake (Mietpreisbremse) isn’t perfect, but it’s arguably Germany’s strongest protection for tenants against rising rents. 

It’s designed to prevent landlords from raising rents to ‘unreasonable’ levels, but with no central agency for enforcement, the burden falls on tenants to demand legal rents.

READ ALSO: German rent brake to be extended until 2029: What you need to know

Andrew, 62, successfully reduced the rent he pays for his flat in Berlin’s Gesundbrunnen area with the rent brake rule. After he realised the “rent was high for the location”,  he contacted his tenant’s association.

He thought that his landlord responded in a reasonable manner: “They thought the condition of the flat justified the higher rent and paid a friendly visit to point out the features,” Andrew said.

“We countered that the features were all quite old and that the previous tenants had been on a lower rate.”

Mieten runter "rents down"

The words “Rents down” are graffitied on the wall of a rental building. About 75% of Berlin rents are set illegally high, a legal expert told The Local. Photo: picture alliance/dpa | Monika Skolimowska

The rent brake prohibits landlords from setting rents more than 10 percent above a local average value, which is recorded in a local rent price index. You can find your local rent price index by searching for the German term “Mietspiegel”, along with the name of your city or region.

Here is one for Berlin, which allows you to calculate your rent index based on your current address and a few factors such as the area of your flat and how old the building is etc.

Andrew recommends joining a tenants’ union and using an online calculator to check if your rent is reasonable. He also says you should be prepared to negotiate and to compromise where necessary.

Gerson, 50, who lives in North Rhine-Westphalia, also found that his current rent was too high for his location. He says he is currently looking for a company that can assist him with the process to demand a rent reduction.

David, 57, in Berlin said he believes his rent is “illegally high” compared to other and he has hired a lawyer to go through the process of trying to get a rent reduction. 

There are also legal service providers that can help with renters’ issues in Germany, and some that even specialise in winning rent reductions with the rent price brake. You can find some of them through an online search. You may want to look for one that will initiate the process at no cost to you. Some will even complete the service with no cost to tenants, applying their fees instead to the landlords at fault in the event that they win a rent reduction.

READ ALSO: Why are Berlin rents soaring by 20 percent when there’s a rent brake?

It’s also worth noting that the rent price brake only applies to rental markets that are considered highly competitive. So it applies to most of Germany’s big cities, but may not apply in suburban or rural regions.

Overcharged by faulty measurements

Rents prices in Germany are usually calculated according to a price per metre of living space. Therefore, in some cases, it may be worth double checking that your living space has been calculated accurately.

One reader, who didn’t wish to be named, told The Local that he had previously reduced his rent for an apartment in Düsseldorf in this way.

“We had a small attic apartment with slanted walls,” the reader said. “The total square metres of the apartment were based on measurement from wall to wall. However, walls had to be straight to a height of at least 1.2 metres before the slanted side can begin [or else] the total square metres start from the point where the vertical height of 1.2 metres is available.”

After he learned about this requirement he measured the apartment, and found that his own rent had been based on a measurement of the floor plan, not the legally defined living space. Then he contacted his tenants’ association, which sent an architect to confirm the measurements.

Initially sceptical, his landlord sent another architect to check the measurements. But when it was confirmed, his rent was lowered accordingly. “Turned out that we had to pay for about 10 square metres less all in all,” the reader said.

This incident was 15 years ago, and these types of regulations can vary from region to region.

His advice to readers is to check up on the local regulations that may apply to your situation. 

In other cases, some renters have been able to negotiate rent reductions for other inconveniences – such as excessive noise, for example.

READ ALSO: How to get a rent reduction for problems in your German flat

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