Study finds supply-demand mismatch in German housing market

Efo Korsi Senyo
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Efo Korsi Senyo
Managing Editor
Efo Korsi Senyo is the Founder and Executive Editor for AN Network - publishers of Awake News, Awake TV and Awake Africa Magazine. He founder Awake...
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FILED - View of the facades of a new building with condominiums in the Berlin-Charlottenburg district. Photo: Monika Skolimowska/dpa

Finding accommodation in Germany‘s main conurbations is becoming increasingly difficult as a result of soaring rentals for new tenants, according to a study published on Sunday.

The mismatch between supply and demand had resulted in a dysfunctional market as a result of the widening difference between rentals for established tenants and new tenancies, the JLL estate agency found.

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Tenants were staying put to avoid paying higher rentals for a new apartment, leading to a fall in supply in an already tight market, the study found.

This in turn was leading to further rent increases for new tenancies, it said, suggesting that true demand could currently be overstated.

The JLL study found particularly large discrepancies between existing and new rental contracts in Munich and Berlin, with tenants reluctant to move to new premises where rentals were up to €8 ($9) higher per square metre.

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They were followed by Frankfurt, where the difference was around €5. By contrast, in Duisburg in the Ruhr region and in Dresden in the east, moving was much easier with the difference coming in at €1.50.

JLL manager Roman Heidrich called for churn in the market to be stimulated, alongside newbuild. Swaps could be promoted, along with moves to allow existing rentals to be raised more easily to market levels.

Parts of Germany are experiencing a severe housing crisis. According to official statistics published on Friday, in the first half of this year, 106,700 new units came onto the market, down 21% on the same period last year, which was itself seen as weak.

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The situation is attributed to increased construction costs and high interest rates

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Efo Korsi Senyo is the Founder and Executive Editor for AN Network - publishers of Awake News, Awake TV and Awake Africa Magazine. He founder Awake in 2012 and served as the Chief Editor until 2022. He is a businessman and investigative journalist. Email: talktosenyo@gmail.com
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