The research company F+B has compiled its Rent Index 2020, revealing the most expensive places to live in Germany. The study found that rents are not rising as sharply as they have in previous years.

Rent prices still on the rise in Germany

If there is one constant thing in life, it’s that rent prices will continue to rise. And that’s what they did in 2020, as F+B has revealed in its latest Rent Index. However, there is a slight silver lining, in that, for the third year in a row, rents have risen less sharply than the year before. Accordingly, comparable rents in Germany increased by 1,7 percent in 2020, while in 2019 they increased by 1,8 percent and 2,2 percent in 2018.

To compile their Rent Index, F+B looked at the official rent indexes of 351 German cities with more than 20.000 residents. Rent indexes show increases or decreases in both new contracts and existing rents. Local comparative rents that are discerned from these rent indexes are meant to give an impression of how much tenants spend on rent.

Rent indexes are collected in most of Germany’s larger cities, as well as many other smaller cities. They are important for landlords, tenants and investors, as they can be used, for example, to set rent prices or justify rent increases.

German suburbs are getting more expensive

F+B’s Rent Index reveals that areas around major cities are becoming more expensive. According to the index, the most expensive area in Germany is the municipality of Karlsfeld, situated just 12 kilometres from the centre of Munich. Three other Munich suburbs - Germering, Dachau and Erding - also feature in the top 10 most expensive areas, reflecting the current pressure on Munich’s housing market.

Stuttgart remained Germany’s most expensive city in 2020, with average net rent reaching 46 percent over the national average. However, three areas in Stuttgart’s suburbs - Leinfelden-Echterdingen, Tübingen and Ludwigsburg - also climbed into the top 10.

Due to significant rent increases in the suburbs, Munich fell to seventh place, after being knocked from the top spot for the first time in 20 years in 2018. Three other German cities - Wiesbaden, Frankfurt and Hamburg - made it into the top 20.

House prices continue to climb

The Rent Index shows that while rents have not risen as sharply in major cities in the past few years, suburban areas and areas around major cities are getting more expensive. The cost of buying a house or apartment has been unaffected by this, however, with house prices rising by 10 percent and apartment prices rising by 11 percent despite the impact of coronavirus in Germany.

You can find more information regarding F+B’s Rent Index on their website.