What are the Top Rental Market Trends in Europe at the End of 2022?

Relocation activity typically slows down towards year-end, but 2022 has been anything but typical.  

New authorizations for destination services have tapered off from the “post-covid crush” of spring and summer, but activity levels remain high. On a broader level, the region continues to work through economic concerns like energy costs and inflation, changes in political leadership, and the ongoing war in Ukraine.  

At the same time, despite headline-grabbing news in some sectors, notably high-tech, unemployment rates have not skyrocketed (remaining at just above 6% in major European economies). For global mobility, rental housing markets have remained highly competitive, due to large backlogs among rental seekers and a continued shortage of supply.

What are our local experts expecting through the end of the year? 

In general, the answer is sustained higher prices, limited availability, and longer stays in short-term housing since home-finding searches are taking longer and overall rental housing stock (short- and long-term) is still slowly being replenished.  

Here is an overview of key markets including Dublin, London, Berlin, Munich, Amsterdam, and Luxembourg.  

Is tech company volatility impacting the rental market in Ireland? 

According to Business Plus, the tech sector in Ireland grew more than any other during the pandemic, surpassing both the healthcare and public administration sectors. 

The very public layoffs across multiple well-known technology companies are seen by most observers here as corrections for fast growth and the need to control costs and budgets in inflationary times; well over 100,000 people in Ireland are employed in technology jobs with foreign direct investment companies, and the economic predictions are for a correction, and then continued growth.  

Is more housing available now in Dublin?  

Only on a very limited scale. The housing market remains competitive for multiple reasons.  For example, over 62,000 Ukrainian refugees have arrived in Ireland and this has had an impact on both the short- and long-term market.  

Over 240 hotels throughout Ireland agreed to close to tourists and commercial clients in order to house Ukrainian refugees for 6 months. Many of those agreements are near to ending and there have been rumors some hotels may choose not to renew their agreement and re-open to the public.  

This will ease the short-term housing market supply as many travelers/assignees previously needed to book serviced apartments as alternatives to hotels for short stays during the busiest months of the year.  

On the properties side, as reported in the Dublin Independent, agents and property managers continue to see same-day "listings and lettings" in the Docklands area, with multiple applications and competitive tenants.   

Dublin’s vacancy rate continues to hover in the 2% range.

There has been an increase in proposed purpose-built rental properties this year, but with construction costs at an all-time high, many sites (42,000 units in planning) have yet to commence development. 

Key Takeaways: 

• The shortage of rental options will continue into 2023.  

• New rental properties are not all subject to the controls of Rent Pressure Zones (RPZ). 

• As leases expire, rental pricing in current housing stock can be adjusted by landlords to local norms. 

• Despite high prices, demand remains high, and options are limited.   

What are rental market trends looking like in London? 

Despite downturns in the UK economy and sharp inflationary increases in the cost of rent and energy, the London rental market remains keenly competitive. Expats, UK locals, and refugee arrivals resulting from the war in Ukraine continue to add to the number of individuals and families looking for rental housing.  

The Knight Frank properties brokerage reported a 68% increase over the past five years in the number of prospective tenants registering across all its branches in London. This type of volume is causing rental values to remain high. Overall rental values have grown nearly 20% in the year through September 2022. 

Potential renters are experiencing skyrocketing prices (with average rent at £2,343), packed property viewings, bidding wars, and properties being let before they’ve even hit the market.  

For those lucky enough to secure a viewing, the competition from other renters includes those offering multiple months’ rent upfront and offering hundreds of pounds per month more than the asking price. 

Key Takeaways:  

• The number of people who will reside in the property, in addition to budgets and pets, all impact the number of available properties. The more requirements, the fewer available rental options. 

• Rising energy costs are impacting budgets and the percent of income the tenant will have to allocate to total rental costs. Utility costs are forecast to increase on a quarterly basis until at least the end of March 2023. 

• Due to the level of interest in properties, many landlords are opting to hold group rather than individual viewings. 

• In some instances, landlords are requiring prospective viewers to complete a pre-application questionnaire to even be considered for a property viewing. 

• Agency fees to letting agents no longer apply; however, tenants are required to pay either the standard check-in or check-out fee. 
• Hard copies of visa documentation for every occupant of the property must be presented to the landlord or agent prior to the commencement of the tenancy. 

• Employees transferring from Russia into the UK are subject to additional compliance and anti-money laundering validation when opening a bank account.  

• This is required to prove that the monies being deposited are acquired lawfully, i.e., through lawful employment in the UK. 

•  Russian nationals will generally need the following documents: 

• Proof of identity document, e.g., a passport. 
• Address verification document for residential address in the UK or overseas.   

• Confirmation of salary may be required. 

How are ongoing volume and challenges affecting rental prices in Germany? 

Employers have been moving large numbers of expats into key German markets since the spring.  The consistently high volume has significantly impacted the availability of housing and the service support process overall. 

Temporary Housing stays in large city markets are currently 90-120 days on average, as sourcing and securing permanent housing continues to take more time. Rental housing, in general, is in short supply, with vacancies below 1% in Berlin and Munich, and other major cities.

Landlords receive hundreds of viewing applications and have their choice of tenants, including German locals who want long-term leases, with fewer exceptions, and have all financial credentials in place.  

The balance of time required to deliver destination services programs has changed: sourcing for property viewings takes significantly longer because there are fewer properties available, and landlords/agents can be unresponsive. 

In some markets, 40-60 applications must be filtered to secure 1-3 viewing appointments.  

Prospective tenants are advised that all viewing appointments should be attended, not all requirements or expectations may be met, and quick decisions are needed to secure rental contracts.  

Key Takeaways:  

• Consultant capacity is fully committed due to the volume of activity.  
• Visa and Immigration and Residency Permits require 3+ months to complete, as agencies work through pandemic backlogs and new volumes related to Ukrainian refugees. 

• Immigration administrators do not respond to phone requests, and in-person meetings (and completed and approved applications) may take weeks to secure. 
• Employees transferring from Russia into Germany are subject to additional legal terms and review and to potential restrictions; Russian citizens do not receive refugee status or benefit considerations. 

What is the ongoing impact of social housing in The Netherlands?  

The Netherlands housing market continues to be fast-paced, most especially in larger cities like Amsterdam, Rotterdam, and the Hague.  It is common practice to see multiple offers being placed on properties before final terms are agreed upon. 

The Netherlands is generally a tenant-paid broker market. Representation is an important service in a country where there is a complex social housing and private rental system. An experienced broker can advise whether a property is being legally advertised in the private sector and therefore eligible for expat tenancy.  

This assessment will become even more important in 2023 when the system will be reviewed as there is a social housing shortage in the Netherlands and the government wants to prioritize housing for Dutch citizens.

Social Housing is generally available to Dutch nationals only and expats generally earn above the limit to be considered for these properties. 

Key Takeaways: 

• The market is landlord-driven and very competitive. Not every application/offer will be accepted as the landlord is often able to choose between multiple applications. 

• Amsterdam is a tenant-paid broker market. The tenant’s broker will confirm whether a property is legally eligible to be rented and is neither a sublet nor a property that should be part of the social housing sector. 

• Lease terms are in Dutch. Dwellworks will confirm the key elements of the lease in English for the customer. 

• It generally takes an average of 1 week to set up a lease agreement following the placement of an offer.  

• Rent, deposit, and agency fee payments all need to be paid and received by the broker and landlord before check-in into the property will occur. 

What has caused the unprecedented housing shortage in Luxembourg? 

The rental market has reached an unprecedented shortage in supply due to the impact of numerous simultaneous market forces.  The natural migration in the market from rental to sales has stagnated due to increased mortgage interest rates. This pent-up market demand would normally drive the sale of new property builds or increase home renovation projects, yet due to the inability to source building supplies, this activity is also paused. 

Increased energy costs have reversed the post-lockdown trend of property upsizing, so local market activity levels are low. Activity in the property market has effectively ceased this fall in Luxembourg. This means that since tenants aren’t leaving their current apartments, fewer properties have become available. 

In a completely new experience in Luxembourg, agencies are receiving hundreds of appointment requests for available properties, often turning off their phones and being unable to respond to all calls.  The landlords now have an extremely large choice of tenants, and will always choose/prioritize their ideal candidate, i.e., National or EU citizens, those with local language skills (Luxembourgish, French, German, or English), or those without pets or children, etc. In addition, the prices of the selected few properties on the market are being driven even higher than before. 

The property search for assignees is therefore demanding more service time and extended time in temporary accommodation is now standard practice, due to the limited supply of permanent/long-term rentals. More time has become necessary to secure any rental property, whether in the cities, suburbs, or countryside.   

 Key Takeaways:  

• Managing employer and assignee expectations in terms of rental property challenges is vital to the success of any service. 
• Budgets may need to be adjusted to address consumer and housing market inflation. 

• Luxembourg is a small country in which rumors spread quickly – trust your destination consultant as the market expert, instead of the local rumors! 

In general, what can renters do to increase their success in finding apartments? 

• Come with realistic expectations and be prepared to be the “best tenant option.” 

• Separate “must-haves” from “nice to haves” and be willing to compromise. 
• Be flexible in timing, price, location, and housing requirements. 
• Keep all viewing appointments and provide the landlord with notice of any cancellations. 
• Act quickly with an application and deposit to secure an apartment.  

How can relocation policy benefits help with rental housing needs? 

Destination Services Homefinding focuses on matching employee needs and budgets with rental options based on market availability. In general, in competitive markets, more time is needed to search for properties.   

A benefit that supports 4-5 days for area orientation, home finding, and settling-in services (such as local registrations, visa paperwork, and school search) will increase the likelihood of meeting expectations for service.  

Shorter term benefits of 2-3 days require that the focus of service is almost exclusively on a home search. While some settling-in services can be self-managed using digital content (such as the information in myDwellworks), other services may require at minimum virtual support from a local expert and in some instances, in-person accompaniment.   

Flexible policies can be designed to align with each employee’s individual circumstances.  A family of 5 moving with a pet will have different needs and time requirements than a single person who prefers to do most of their service management via digital tools and virtual engagement.   

Core–flex programs that support a baseline of service, as well as individual choices and customized requests, are both cost-effective and responsive to diverse populations with variable needs.  

Housing budgets should be reviewed based on market pricing and trends. Competitive conditions are likely to persist in a number of key European markets into 2023. The local expertise of destination services providers, with their extensive and detailed knowledge of the property market, can be used by RMCs and global mobility managers in establishing appropriate budgets for expatriates. 

Dwellworks Destination Services in Europe 

• Dwellworks is the largest provider of Destination Services for corporate mobility across key European markets. 
• We provide expert, in-market support through a trained and experienced network of 200+ local experts in the region. 

• Dwellworks Consultants contact real estate agents, private landlords, property managers, community managers, and developers, and review online postings daily. 
• Consultant familiarity with landlord requirements and translation assistance are assets in securing appointments in a competitive marketplace. 
• Dwellworks Consultants will prepare employees for the best possible presentation to landlords, advising on required documentation, proof of employment, monthly earnings, and communication with landlords. 
• Employees will be coached to show up for all viewing appointments (which are typically not rescheduled) and advised there is limited-to-no landlord negotiation. 
• Dwellworks local experts can advise alternative neighborhoods since the areas with strong name recognition tend to also have the highest price and least availability.  

• Consultants will explain the school placement process in detail and that housing and school choice may not meet an assignee’s first preference. 
• Dwellworks provides regular updates for our RMC supply chain contacts to share with service teams and account management to manage customer and client expectations. 
• Dwellworks will advise clients of any instance where Consultant support is not available/delayed due to high volume and current in-process commitments to service. 
• We advise clients to expect staged management of service delivery (i.e., near arrivals will receive more immediate attention than those scheduled 90 days out) due to consultant availability and time required for property search. 

About Dwellworks  

Dwellworks provides destination services and temporary living solutions for tens of thousands of customers every year. Visit our homepage, learn more on our services page, and read our blogs to learn how we can help with your corporate relocation and business travel needs.  

Dwellworks provides guidance and support in fast-evolving property marketplaces. Information contained herein is deemed reliable but not guaranteed.