As Deutschlandfunk reports, rents for new contracts in Germany have continued to rise. The German Economic Institute (IW) announced in its "IW Housing Index" that prices for new rentals from January to March of this year increased by 3.5 percent nationwide compared to the same period last year.
The increase affects all regions, with the dynamic being particularly pronounced in major cities. The IW regularly collects data based on asking rents and actual new contract signings. The current figures reflect the ongoing shortage in the housing market, which is exacerbated by rising construction costs, interest rates, and insufficient construction activity.
Experts from the IW point out that the rent increases are particularly burdensome for households with lower incomes. In metropolitan areas such as Munich, Frankfurt, or Berlin, rents for new contracts are already significantly above the national average. The federal government has announced various measures to promote housing construction and curb rent increases, including higher depreciation options and simplified building permit procedures. Whether these measures will have a short-term effect remains to be seen.
The IW Housing Index is considered an important indicator of the development of the German housing market. It is based on a broad data set and is published quarterly. The current figures underscore the urgency of increasing the housing supply to reduce pressure on rental markets.
