The housing and rental market in Germany is becoming increasingly more competitive, as properties are being rented rapidly and supply is in decline. This directly correlates to the increase in rental fees in the major markets of Berlin, Munich, Hamburg, Frankfurt, Dusseldorf, Stuttgart and Cologne. The rise of rental fees for these cities have shown the upward trend of 1% to 7% between 2014 and 2015, and continued to increase in 2016. The outlook for 2017 remains challenging as rental prices are not projected to drop.
Because of the current market, vacancy rates are exceptionally low, with Frankfurt reporting a vacancy rate of 0.5% and Munich 0.2%. Open viewings for desirable apartments are more prevalent, because 30 or more potential tenants could show up to tour an available rental. Private offers directly from landlords through newspaper and online advertisements are also increasing, which in turn, can make scheduling viewings more difficult. It is not uncommon for landlords to ignore calls or emails regarding a property, due to soaring interest.
Estate agents and landlords have reported receiving between 50 and 100 applications for a single property, and viewings can be comparable to job interviews in that potential tenants need to come well-prepared, with all necessary documentation ready for the landlord. In the current climate, negotiations over lease terms are uncommon, and quick, sometimes immediate, decisions are required from those interested in a particular property.
Delays in the Application Process
Due to the current situation of a significant increase in the number of expatriates moving to Germany, delays in the application process can be expected. This includes registration at places of residence, as well as work and residence permit applications. Due to the authorities’ workload, appointments at the local city halls can often only be obtained for several weeks in the future and there is less flexibility in the process. Some city halls do not give appointments at all, meaning there can be long waits for walk-in appointments. This is most prevalent in the major markets of Munich, Frankfurt, Cologne, and Bonn.
