Companies sending employees on work assignments or extended business travel in Europe this summer and fall will find the rental landscape is still a challenging one. As with most major global economies, the UK and most countries in the EU have been balancing higher interest rates on a path to lowered overall inflation while also dealing with low supply and higher demand for housing. In some markets, notably Dublin and Amsterdam, the housing supply is at historic lows. The need has never been greater for on-the-ground assistance from local experts who know the market and landlords and property managers who can navigate complex regulations with their years of experience and local familiarity.
Read on for insight on rental housing costs, reasons for the high demand and low supply, landlord and tenant rights, effects on school choices in 8 key European locations, and suggestions to successfully find a home and adjust to daily life in each location.
Note: rental market price data is indicative only; actual rates vary significantly with location, property size, amenities, etc.
The country remains one of the most hospitable in Europe for migration, but high demand and low supply led to an 11.6% YOY average increase in rent in Dublin. The government is stepping in to support new apartment construction, but there is little expectation of much new inventory hitting the market in 2023. With dozens and sometimes hundreds of lease applicants for a limited number of listings, it’s best to act quickly and be flexible with housing requirements. It’s also important to note that competition is high in Dublin and Ireland overall because of the country’s well-known reputation for encouraging foreign investment and new jobs. The tech sector is volatile but still strong.
The return to office trend is challenging residential rental rates in London. Three-quarters of employers are requiring a minimum of a few days in the office each week. As one estate agency estimates, this has resulted in 30% of new rentals going to tenants moving back to the city. Commutable suburbs and alternative neighborhood options like Fulham, Parsons’ Green, and South Kensington are suggested for global assignees and business travelers searching for accommodations at more reasonable costs.
The average rental rate in London is now just under 2600 GBP per month and higher in the highly desirable neighborhoods of Central London. Though hundreds of building permits are being issued and more high-density housing is coming to market in the next year-and-a-half, renters should expect limited landlord flexibility for now as London remains highly competitive.
A new law announced on 1 July to go into effect in January 2024 confirmed that the Dutch government will regulate rate increases for mid-market rentals. To be determined is the oversight impact on Dutch landlords and the availability of inventory because more regulation may deter further development. Overall, rental units remain in short supply in the ‘big five’ cities of Amsterdam, Rotterdam, The Hague, Utrecht, Eindhoven, and their nearby suburbs.
Luxembourg continues to support a workforce that overwhelmingly originates outside its borders. Even in a slowed-down economy in 2023, the country’s unemployment rate is low overall, and assignees should expect strict rental laws (sizes of units, number of bedrooms, and pets) and landlords who have little incentive to negotiate their required terms, including an expected security deposit equal to 3 months’ rent.
Tax laws regarding telecommuting have been updated throughout the pandemic to reflect the reality of a ‘commute economy’ with half the workforce living in Germany, Belgium, or France. As a result, many commuters have moved to Luxembourg to manage their tax exposure and minimize the long commutes.
Even with persistent demand, the supply of housing in Germany continues to be held back by financing and land laws. Cities like Berlin, Munich, and Frankfurt, while not experiencing the unprecedented influx of 2022, are still high-volume relocation destinations with low rental vacancy rates. More remote locations, such as Magdeburg, Guben, Cottbus, and Wismar, are future sites for chip and lithium battery factories but are in the planning stages and still building local housing and support infrastructure. In general, across Germany, landlords have their choice of tenants, often preferring German-speaking renters with long-term leases, fewer requirements, and all financial credentials in place. Landlords will not flex on pricing and inbound assignees need to be aware there is no bargaining. All viewing appointments should be kept, and quick decisions and flexibility are key to secure rental contracts.
Even in the City of Light, demand outweighs supply. Well-qualified renters who would like to become buyers are held back by high mortgage interest rates, with the knock-on effect of fewer properties available for new arrivals. In high-demand areas, the rental amount is capped by law, but that amount differs from location to location and depends on whether the property is furnished or unfurnished.
Looking ahead, the Paris Olympics are one year away, with the opening ceremonies on 26 July 2024. Expect a surge in temporary housing needs and impacts to transportation, government, and office operations. Read more about other trends in temporary housing surrounding the Paris Olympics and other upcoming events here.
While Switzerland is not immune to the slowed growth across Europe, unemployment remains low and interest in living in Zurich remains high. Expats make up over 30% of the population and 800+ multinational corporations have regional or global headquarters in Zurich. This means there is always competition for the limited rental housing available, which comes on and off the market quickly. Nearly 60% of the population are renters, both Swiss residents and foreigners, which can make finding housing a challenge. Booking assignees into a short-term rental while they look for a more permanent place is always advised, as is considering more affordable neighborhoods and housing just outside the city center, which are easily reached by the excellent local train and transportation system.
Vienna is the world’s most liveable city per The Economist’s Global Liveability Index – a ranking it has achieved many times. This cultural capital offers all the expected amenities, including good housing options and a very commuter-friendly local and intra-European transit system. However, low rental supply in expat-preferred neighborhoods is common here as elsewhere, especially for bigger apartments and/or houses.
Note that when it comes to bookings, agents in Austria are ‘paid by those who hire them,’ which could be either the tenant or the landlord. The commission is typically 2 months' net rent plus 20% VAT if the contract is over 3+ years long and 1 month’s net rent if the rental contract is shorter. Given the agents’ economic incentive, most contracts run for 3-5 years.
Need Help Navigating These Challenging Markets?
At Dwellworks, the world’s largest provider of corporate Destination Services, market expertise and empathetic understanding are built into every service experience we deliver. Our 98% customer satisfaction rate proves we are the leading provider in Europe and across the world. Expect expert, in-market support in Europe through 300+ local Destination Consultants who contact agents, private landlords, property managers, community managers and developers, and review online listings to create well-sourced, realistic property viewing agendas and plans of action for globally mobile professionals and their families. Destination Consultants also help expatriates and corporate travelers settle into their new environment through their extensive knowledge of area schools and local familiarity with everything from neighborhood coffee shops to the most efficient government offices for licenses and registration.
Dwellworks can provide the intelligence and support you need if you have talent moving to these gateway cities. For all other quarterly market updates, read our blog or subscribe to our newsletter.