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RENTING

Why rents for some properties are starting to fall in Germany

Rents are on the rise in Germany, but not at the same rate everywhere. A recent study by Immoscout shows a difference in demand trends for existing apartments and new builds.

Published: 6 February 2023 17:01 CET
Updated: 7 February 2023 08:25 CET
A crane stands at a construction site for offices. In the foreground, a new building with apartments can be seen.
A crane stands at a construction site for offices. In the foreground, a new building with apartments can be seen. Photo: picture alliance/dpa/Deutsche Presse-Agentur GmbH | Sebastian Gollnow

There’s not been a lot of good news for renters in Germany recently. Rental costs continued to rise throughout 2022 and, with increasing demand in the rental market, tenants find themselves in a poor negotiating position at the moment. On top of that, renters have also had to contend with rising utility costs, as data from the fourth quarter in Germany showed that Nebenkosten (ancillary costs) now account for 18.3 percent of the total average rent.

However, within this trend of increasing rents, there are certain property types for which rental prices are starting to drop.

In expensive cities, such as Berlin, Cologne and Düsseldorf, there has recently been a significant divergence between the rents on offer for Bestandwohnungen so-called “existing apartments” and for Neubauwohnungen –  “new build apartments”.

READ ALSO: Ask an expert: Is now a good time to buy property in Germany?  

The term Neubauwohnung generally refers to properties that are currently under construction or have been completed in the last five years, while Bestandswohnungen – existing apartments – are apartments or houses of older construction years.

The latest housing barometer from Immoscout24 shows that rents for existing apartments in major cities were only slightly more expensive in the fourth quarter of 2022 than in the previous quarter, while in Berlin, Cologne and Düsseldorf, the rental prices for existing apartments even went down slightly.

Newly built rental apartments, on the other hand, were significantly more expensive than before in almost all major metropolitan areas.

Looking for a new apartment? Check our rental listings to find your next rental apartment

New-build apartments in higher demand

In Germany as a whole, there has so far only been a slight shift in demand from existing to new construction properties but in certain cities, there has been a significant change.

Berlin, for example, saw a significant decline in demand for existing rental apartments for the first time last year. On average, an advert for an existing rental apartment received 139 contact requests per week in the fourth quarter of 2022. At the same time, demand for new rental apartments rose from 76 inquiries per advert per week in the third quarter to 99 inquiries in the fourth quarter.  

READ ALSO: OPINION: Germany’s ruthless housing market is tough on new tenants – but there are winners

In Munich, too, demand for existing rental apartments was significantly lower in the fourth quarter than in the previous quarter. From an average of 75 inquiries for an advertisement per week, demand fell to 63 contact requests. Demand for new-build rental apartments increased by 22 percent in the same time frame. 

In Cologne, Hamburg and Düsseldorf, demand for existing rental apartments was also down compared to the previous quarter. 

“Demand pressure is easing in the short term in the area of existing rental apartments. This is only a small consolation, as demand in the metropolitan areas nevertheless remains at a very high level,” said Dr. Gesa Crockford, Managing Director of ImmoScout24.

Dr. Crockford attributed the shift in demand to increasing energy costs and the desire for more energy-efficient homes. 

“Tenants seem to be increasingly looking for new-build apartments, which are significantly more energy efficient than the often inadequately refurbished housing stock, due to concerns about rising energy costs,” she said. “Accordingly, demand and asking rents for new constructions are increasing at a much faster rate than for existing stock.”

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PROPERTY

Why it’s hard to find an apartment with air conditioning in Germany

When temperatures start to get up to 30C or more in Germany, a familiar debate begins. It often starts with a simple question, asked by a new arrival to the country: “Why don’t German homes have air conditioning?”

Published: 25 June 2024 16:58 CEST
Why it's hard to find an apartment with air conditioning in Germany

The tendency to avoid air conditioning (A/C) is not uniquely a German trend. Europeans tend to use A/C less than residents in the US, and some countries in Asia.

But as temperatures have crept slowly upwards due to climate change, and the number of hot days has increased, Europe has seen an increase in demand for air conditioning. Across the continent A/C use has more than doubled since 1990.

But A/C is used much more commonly in countries that see higher temperatures like Spain, Italy or France, whereas it is still uncommon in homes in Germany.

So why does Germany tend to lack air conditioning, and why aren’t more Germans interested in installing it?

It’s not a ‘hot’ country

Ask a German why air conditioning is so rare in the country, and you’ll probably hear some version of “Well Germany is not such a hot country.” Which may be true generally, but is a less than convincing explanation if you hear it on a sunny summer day when it’s 35C outside.

But it is worth keeping in mind that while Germany does have warm summers, often with at least a couple heat waves, super hot days are few compared to warmer countries, like those in southern Europe. 

Given Germany’s weather can really only be described as hot for a few weeks out of each year, and considering the costs of installing and running air conditioning, most Germans figure it’s not worth it.

attic with sliding window

A sliding attic window is designed to help tenants cool off, but it won’t help to open windows during the hottest part of the day. Photo: pa/obs LiDEKO | LiDEKO

This isn’t only reserved for homes, but extends to plenty of public spaces including office and government buildings, and to some public transportation as well. 

In fact, schools and workplaces do occasionally call it quits during hot weather spells in an event called hitzefrei.

READ ALSO: Ditching AC for ‘Hitzefrei’ – Taking on the German summer as a Californian

Air conditioning is energy intensive and expensive

The other side of the argument against air conditioning is that both installation and operating costs can be expensive. Air conditioning tends to be energy inefficient, so using it can significantly increase your utility bill.

From an environmental point of view, all the energy used for air conditioning, if Germany was to start installing A/C at scale, would add to the country’s energy demand and greenhouse gas emissions – both of which Germany is already struggling to cut down year after year as part of its climate goals.

It is an ironic feature of traditional air conditioning that it creates a negative feedback loop: More people rely on air conditioning to stay cool as weather warms, but weather continues warming in part due to emissions from air conditioning.

That said there are cases where access to air conditioning can save lives. In particular elderly people and those with health-risks are prone to heat sensitivity. So while it’s probably good that not every house in Germany has A/C, it’s important that hospitals and some other buildings in a given city do.

READ ALSO: How German cities are adapting to rising temperatures

‘Cold air makes you sick’

Along with the reasonable (if debatable) reasons for the lack of A/C in Germany, there are also cultural factors.

On the social media website Reddit, a user posted the question, “Will more places in Germany start using air conditioning?”

One of the top comments read, “Don’t you know cold air makes you sick….says Oma (the German word for grandma). 

While that comment comes off a bit tongue in cheek, it touches on a real and deeply-ingrained belief that persists among parts of the German population: That exposure to cold, or even maybe a cool breeze, is bad for your health. This includes a draft in your house, called a Durchzug in German.

For this reason, the German Red Cross felt compelled to debunk the Durchzug health myth in a hot weather warning they issued in 2019.

a heat pump is installed

An employee inspects a heat pump in front of a newly built residential building. Heat pumps are also effective for cooling. Photo: picture alliance/dpa | Bernd Weißbrod

What can you do about the heat?

Regardless of where you stand on the air conditioning debate, if you don’t have a personal A/C unit at home presently, the best way to endure the hottest days of summer may be to take a few tips from the locals.

During my first summer in Germany, I took to leaving the windows open throughout the day, thinking that the occasional warm breeze was the best relief I could hope for at home. But one day my landlord came by and asked me why I was suffering in the heat with the windows open.

He recommended that I instead leave the windows open at night or in the early morning to get some fresh cool air inside, and then keep all the windows closed through the heat of the day. I tried this strategy the next day, and immediately felt that he was right.

Compared to homes in the US, for instance, German homes tend to be very well insulated. This can be equally important in the summer as it means that the interior tends to stay cooler than the outside (as long as you keep it mostly sealed off).

On extremely hot days, you might even keep your shutters down to shade the windows and prevent the sun from shining through.

Of course the effectiveness of the strategy depends on having a home that’s well insulated, including double paned windows and well-sealed doors etc. If you feel that the inside of your house is getting as warm or warmer than the outside, then it’s probably time to open up the windows or go outside and sit in the shade.

Fans are also useful. Best is a ceiling fan designed to rotate counter-clockwise to push air downward, which can maximise wind chill within a home, but floor fans can also help.

Ironically, in the longer term it may actually be heat pumps that help Germany to modernise its cooling infrastructure. 

Heat pumps maximise the efficiency of heating systems by moving warm air around a building, and they can also work with cooling systems. Many heat pump systems on the market today are already built to support both heating and cooling functions, and they are much more energy efficient than classic air condition systems.

READ ALSO: Who can apply for Germany’s new heat pump grants for homes?

Unfortunately for tenants with no heat pump and no A/C, the best you can do for now is take notes of cool places in your city where you can relax in the shade or in the water during the hottest hours or the hottest days.

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