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Housing market: Tenants’ association complains about exorbitant rents due to slow construction activity

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Housing market: Tenants’ association complains about exorbitant rents due to slow construction activity

The tenants’ association fears a further drastic increase in rents due to the construction crisis and hundreds of thousands of missing apartments. Even in high-price regions like Munich, rents for existing contracts have risen more than ever before in the past two years, said Tenants’ Association President Lukas Siebenkotten Augsburg General. “The current rent index for Munich showed average rent increases of a horrendous 21 percent compared to the previous rent index, a shock for all affected tenants.”

Tenants’ associations nationwide were receiving more and more requests for advice about massive rent increases, Siebenkotten reported. “Tenants are increasingly worried about how they can manage their rent and the ever-increasing energy costs.”

Rent freeze and hard rent controls

The federal government must finally act and put the creation of affordable housing at the top of its priority list, demanded the tenants’ association president. A rent freeze for existing properties and a strict rent cap for new rentals are also necessary. Rent usury must be punished and index rents must be banned.

In contrast to graduated rents, which provide for a contractually agreed increase, index rents are linked to the general rate of inflation. From 2002 to 2022, the overall inflation rate was almost 40 percent; an apartment rented 20 years ago with an index rent would then be 40 percent more expensive.

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The legal situation stipulates that under the current rent cap, increases of 20 percent are generally permitted within three years.

More on the topic: Housing shortage

Social housing: tomorrow’s vacancies

Rental prices: Will rents soon be like those in Paris or London?

The leading association of the German real estate industry, ZIA, complains that construction costs in Germany are higher than in any other European country due to government regulations. “Rents inevitably have to rise because the costs of providing living space are exploding,” said ZIA President Andreas Mattner.

There is currently a shortage of half a million apartments in Germany, and by 2027 there could be up to 830,000. “This is becoming an increasingly serious social problem,” said Mattner. In view of the high financing costs, he called for a government funding program with an interest rate of no more than two percent.

In contrast, there are still statements by Federal Construction Minister Klara Geywitz (SPD) that 1.7 million apartments in Germany are empty. However, the majority of them are in rural areas.

The tenants’ association fears a further drastic increase in rents due to the construction crisis and hundreds of thousands of missing apartments. Even in high-price regions like Munich, rents for existing contracts have risen more than ever before in the past two years, said Tenants’ Association President Lukas Siebenkotten Augsburg General. “The current rent index for Munich showed average rent increases of a horrendous 21 percent compared to the previous rent index, a shock for all affected tenants.”

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