SHARE
COPY LINK
For members

RENTING

How a boom in furnished flats is driving up rental prices in Germany

With the housing crisis making it near impossible to find rental properties in Germany, more and more people are turning to furnished flats. But experts are concerned about high prices and a lack of transparency.

Blocks of rental flats in Berlin.
Blocks of rental flats in Berlin. Photo: picture alliance/dpa | Monika Skolimowska

What’s going on?

As rents continue to soar and housing becomes a scarce commodity, conditions are tough for anyone trying to navigate the German rental market.

Despite Germany’s strong renter protection laws, many tenants are resorting to overpriced apartments just to find a place to live, particularly in major cities like Berlin and Munich. 

According to data from rental portal Immoscout24, the share of furnished rentals on the market has increased from eight percent to 11 percent since 2019.

In the five big cities of Berlin, Frankfurt, Munich, Hamburg and Cologne, the situation is much worse, with furnished flats making up a third of all properties on offer. 

On average, furnished apartments cost €10 more per square meter than other rental flats, though the price gap is much higher in the capital. According to ImmoScout, renting a furnished flat in Berlin will set you back around  €36.82 per square metre, making it even more expensive than pricey Munich. 

READ ALSO: How to find the best place in Germany to move to

Even outside of the major cities, furnished flats let out for exorbitant rents are becoming increasingly common, and experts say this is having an impact on the wider market. 

“We are observing a considerable and increasing supply of furnished flats,” Christian Oberst, Senior Economist for Housing Policy and Property Economics at the German Economic Institute (IW), told Tagesschau.

“Furnished flats are rented out at considerable mark-ups, especially in tight housing markets,” he said, adding that rents for furnished flats are significantly higher than those for comparable unfurnished flats.

According to the German Tenants’ Association, these high rents then feed into the rent index and drive up prices across the board, creating a “vicious cycle”. 

Why are furnished flats so popular?

It’s no secret that there’s a major imbalance between supply and demand when it comes to housing in Germany, and foreigners in particular can have a hard time getting their foot in the door. 

In this tricky environment, paying over the odds for a temporary furnished rental may feel like the only option. Rather than attending endless “castings” for affordable properties, many furnished flats can simply be booked online like an Airbnb, via sites like Wunderflats and HousingAnywhere. 

A key in a front door.

A key in a front door. Image by Photo Mix from Pixabay

Aside of the relative ease of finding a furnished flat, this type of rental also tends to be popular with people who are living in Germany for a shorter period of time and don’t want to invest in bulky furniture.

That might go some way to explaining why the international hub of Frankfurt is the place with the highest proportion of furnished flats in the country. At 41 percent of the housing stock, furnished apartments make up almost half of the properties available in Frankfurt, catering to an audience of consultants and bankers who are only living in the city for a short time. 

READ ALSO: Your best hacks for finding a rental home in Germany

Why are they so expensive? 

Though there are some rules regulating how much landlords can charge for furnished rental properties, adding furniture to a rental room or apartment has become a well-known loophole for getting around strict rental laws.

That’s because temporary furnished flats exist in a legal grey area when it comes to rent controls, meaning many landlords feel they have carte blanche to charge whatever they want.

In the case of long-term rentals, furnished flats shouldn’t cost more than 10 percent more than comparable unfurnished rentals – and certainly not more than double as is the case in Berlin. However, defining a long-term or temporary stay has proved tricky in previous cases, as landlords can argue that any cap on the rental contract makes it a “temporary” stay.

Rental contract

A man fills in the details of a rental contract by hand. Photo: picture alliance / dpa | Armin Weigel

One condition of charging more for a furnished flat is if the tenant is living there for a specific purpose, such as completing a training course or work project in that city, but this usually tends to be fudged or skimmed over in the tenancy agreement. 

Another big issue is a lack of transparency about how much of the rent is due to the flat being furnished, making it hard for tenants to work out if they’re being overcharged or not.

Since it’s not always easy to guage how much the furniture is worth, it’s also difficult to work out if the surcharge a landlord is chaging is reasonable – though tenants are usually kept in the dark about what this surcharge is in the first place. 

Are politicians taking action on this? 

There’s been some talk about this, but things are moving slowly right now.

In April last year, Housing Minister Klara Geywitz (SPD) declared that she wanted to close the loopholes that allow landlords to subvert the rent cap by offering furnished flats.

In an attempt to put this issue on the agenda, Bremen and Hamburg brought the topic of furnished flats to the Bunderat, who sent a bill with proposed amendments to the Bundestag. According to the parliamentary website, this bill still hasn’t been discussed. 

READ ALSO: What will happen to rents in Germany in 2024?

As part of their campaigning work, the German Tenants’ Association has been calling for more transparency when it comes to itemising rents and additional charges for furniture, arguing that this would help tenants work out if they’re been overcharged.

Of course, another way furnished flats could be minimised on the market is to ensure enough affordable housing for all, but with minimal social housing and anaemic construction rates, this type of solution feels a long way off. 

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

RENTING

What to know about changes to cable TV fees in Germany this July

Millions of people renting an apartment in Germany will have received letters in recent months about a significant change to cable TV connections happening from July. Do you have to take action?

What to know about changes to cable TV fees in Germany this July

Up to now, many tenants in Germany have been paying cable TV connection fees as part of their Nebenkosten – additional costs – in their rental contract. 

That’s due to a rule called the ancillary cost privilege (Nebenkostenprivileg) dating back to the 1980s which meant landlords in Germany could set up agreements with telecom companies to supply cable network to entire buildings and charge their tenants. 

It typically costs tenants around €5-€9 per month, depending on the contract. 

The law was abolished as part of an amendment to the Telecommunications Act (TKG) and came into force on December 1st, 2021. However, the transition period lasts until June 30th 2024. From July 1st, a new system applies where landlords will no longer be in charge of these contracts and fees. 

READ ALSO: The five weirdest and best German TV shows for improving your German 

Do I have to take action?

If you’re affected, you should have received notice from your landlord about the change. You may also have been contacted by service providers urging you to set up an individual contract to avoid losing your cable TV connection. 

If you want to continue having access to cable TV in your home, you might have to arrange a new contract – but remember that you can shop around to do so, you don’t have to stick with your current provider. 

Will the costs change?

A downside of this change is that your cable costs are likely to go up. An individual contract for cable TV could be a few euros more or even double what tenants currently pay (depending on their current deal with the landlord). 

That’s because landlords are generally able to negotiate better deals for a full building or set of apartments as part of ‘multi-user’ contracts.

READ ALSO: Why tenants in Germany could face higher costs for cable TV this year

However, consumer rights groups expect prices to fall in the long term due to more competition. 

Do I have to pay this new fee?

There’s no obligation. If you want to continue accessing cable TV channels, you can opt for alternatives such as DVB-T2 HD, which offers around 40 channels in high definition with an indoor or rooftop aerial, or satellite television. 

Meanwhile, experts say that if you only use your cable connection for broadband Internet and/or the telephone, you can stick with the contract. If the TV signal is not used, the provider should install a corresponding filter box on the connection. 

Around one in five households in Germany uses the Internet to stream TV rather than using a cable or satellite connection – and this figure has doubled in the past five years. 

It is also possible to take out a contract for cable TV and another for Internet and telephone with a different provider. 

If you have any queries, you should contact a service provider or consumer rights group for advice as soon as possible to look at your options. 

Be wary of salespeople trying to strike a quick deal

The consumer advice centre is warning against so-called media consultants visiting people at home or calling because they may at times put consumers under pressure to sign cable contracts.

Consumer protection organisations advise consumers taken by surprise not to act too hastily. 

If you have any doubts, take some time to think about your options and only conclude contracts after you’ve made a firm decision. 

SHOW COMMENTS