BerlincTypeface:> Rents in many German cities rose again this year while purchase prices for building plots, detached homes and owner-occupied flats fell, according to an analysis by the German Institute for Economic Research (DIW) made available to dpa. Rents were up 4% over 2024. When compared to 2010, net rents, not including utilities and other charges, have risen by 64%, the institute said. But flat buyers and some other property purchasers saw prices decline by 5%, the DIW said based on a analysis of purchase and rental transaction data from more than 150 German cities from the Real Estate Association. The analysis covered small towns with a few thousand inhabitants up to metropolises. But purchase prices have been rising since mid-year, wrote DIW economists Konstantin Kholodilin and Malte Rieth. The likely reason is a fall in interest rates and the high demand for housing from a growing population, while supply remains scarce. This is also shown by the “historically low vacancy rates,” the report said. Vacancy rates have fallen an average 2.5% since 2022 and are even lower in large cities. For Berlin, for instance, the vacancy rate stands at 1%. A housing market is considered tight if the rate falls below 3%. (dpa)
