Inflation is slowing in Europe, hovering near 3% compared to 5.5% last quarter, leading to a slight ease on some economic pressures as the first quarter of 2024 begins. However, housing demand outweighing supply and a continued trend of private landlords leaving the rental market due to high operating costs continue to make key European cities tricky to navigate for corporate assignees, local renters, and students alike.
Looking ahead, the July 2024 Olympic games in Paris present an additional challenge since the city and surrounding region expect millions of visitors, making cross city travel and home search difficult, and in all events, there will be a shortage of housing due to an expected surge in demand for apartments. Read on for more information on the games’ impact from Dwellworks experts.
Finding a place to rent with the help of a Dwellworks expert increases the chances of securing exactly what any relocating employee or extended stay traveler is looking for, thanks to our industry reputation and our ability to predict trends from years of experience. Start here to find information on a particular city’s rental trends and then reach out to get help with relocation home search and destination services.
Dublin: Rental Availability Improves From Recent Years
A headline through most of 2023 was the continued shortage of rental availability, but that began to improve in the fourth quarter. This year, the government expects more economic growth from multi-national corporations and more multi-family housing coming to market, leading to a slight increase in rental availability. Landlords have also lowered pricing for excess inventory at the high end of the market, though entry-level units are still hard to find in general.
The smaller rental markets in Cork, Galway, Limerick, and Wicklow are seeing an increase in cost, as supply is limited in these alternative locations, which are experiencing a surge in corporate activity.
London: Rental Rates On the Rise Again
The average rental rate in London is now around 2650 GBP ($3200) per month, and economists predict rates will continue to increase this year after a brief respite in the pace of rental rate increases in 2023. London is a magnet for renters, and the post-Brexit economy has not slowed the arrival of qualified foreign nationals on assignment, who compete for housing with a growing local population.
New housing is also coming online as “build to let” construction is finished, but availability is expected to remain tight in the highly desirable neighborhoods often preferred by relocating professionals.
Amsterdam and the Netherlands: New Laws Lead to New Challenges
There are 50% fewer rentals available here than in 2021 and several factors have contributed to housing challenges. New housing laws are cracking down on illegal rental activities, such as unqualified renters applying for certain units and more units than ever before have been allocated to social housing. Increasingly tight supply and ever greater demand are also causing a responsiveness issue, as landlords and agents typically do not organize virtual tours, make exceptions, or accommodate other special requests to fast track any kind of rental agreement.
Also, as of January 1, 2024, laws have gone into effect impacting the tax-protected status of highly qualified foreign workers’ income; employers should verify these tax guidelines with their tax advisors.
Supply is also limited in nearby suburbs and in Rotterdam, Den Hague, Utrecht, and Eindhoven.
Luxembourg: Modest Growth for a Market with Fixed Inventory
With lower inflation and interest rates, modest growth is expected in 2024 among the financial services businesses that power the Luxembourg economy. However, many other local economic factors are largely unchanged here, limiting any likely changes in the rental market. The stock of rental housing is relatively fixed, despite a constant level of demand, and landlords do not negotiate terms with prospective tenants. Landlords are also strict in enforcing rental laws and expect full compliance.
Berlin, Frankfurt, Munich, and Other German Cities: No Changes on the Horizon
Little change from last year means rental rates remain high and the pace of new construction is not budging due to a mixture of costs and regulation. While the German economy is expected to experience flat to no growth in 2024, the government is encouraging corporate innovation and companies continue to send talent here as a key expatriate destination. The added demand is not good news for availability rates. They remain at 2% or less for Berlin, Frankfurt, Munich, and all their surrounding suburbs. The cost of rent is lower in more remote locations, but the housing infrastructure is also more limited.
Paris: All Eyes on the Olympic Games
Short-term housing is starting to be snatched up in Paris ahead of the 2024 Olympic games. This is on top of the already-existing storyline of apartment demand outpacing supply, so corporate employers are advised to schedule employee moves well before or after the games. See our full guide on the games here.
Landlords in Paris are subject to laws that impact the housing market, like capped rental rates in several neighborhoods and the country’s commitment to lower carbon emission goals, resulting in a number of apartments being retrofitted and temporarily pulled off the market. When it comes to buying a home, high interest rates have held back would be buyers. All told, the Paris rental housing market will be competitive and very busy in 2024.
Zurich: A Surging Center for Technology
While prices are high, Zurich overall remains a desirable relocation destination.Quickly becoming a hub for innovation and entrepreneurship due to several notable universities and a large tech talent pool, housing prices are also rising. Landlords are traditional however, and Zurich is not experiencing a parallel surge in multi-family development. As an alternative, excellent transportation systems makes it an easy commute from nearby towns with lower rental rates and more housing options.
Because of the need for relocating employees to explore both center city and outlying suburbs, companies are encouraged to book assignees into short-term rentasl to get familiar with their housing options.
Vienna: Still Riding its Welcoming Reputation
Voted the world’s most livable city several times, Vienna continues to maintain this reputation thanks to its cultural amenities, ease of transportation, excellent schools, and a range of family-friendly housing. There is also availability in the state public schools and kindergarten is free with decent availability, though international schools are competitive and have low availability.
A recently enacted law in Austria states that private rental real estate agents are ‘paid by those who hire them’, meant to ease the burden on potential renters. However, landlords will typically add the cost of brokerage fees to the rent.
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