The housing shortage in many parts of Germany is driving up rents. The increase in newly rented apartments is on average twice as high as inflation, as new data from the Federal Ministry of the Interior show.

Tenants have to pay more and more for their apartment.

Dhe rent increase in many parts of Germany continues unchecked. Owners demand hefty surcharges for new rentals: the asking rents recently climbed more than twice as fast as the national average than general inflation. This is shown by a response from the Federal Ministry of the Interior to a request from Green MP Chris Kühn, which the German Press Agency has received.

Accordingly, the new rents that owners charge rose in the second quarter of 2018 by 5.3 percent compared to the same period in the previous year, but consumer prices only rose by 2 percent. In the first quarter, rents climbed 5.5 percent, while inflation was 1.5 percent. In the three-month periods of 2017, too, new rents grew much faster than inflation rates. While the federal government wants to combat the increase with incentives for affordable housing and a stricter rental price limit, associations are calling for fewer requirements and taxes.

In order to determine the data, the Ministry of the Interior responsible for construction has, according to the information, evaluated both offers from pure online real estate platforms and from online housing exchanges that are offered by various daily newspapers on their websites. Accordingly, the advertisements included net rent for unfurnished apartments between 40 and 130 square meters without incidental costs. Rents from existing contracts were not recorded. No information was given about the rents actually achieved and the existing rents.

It is no surprise that new rents are rising faster than inflation

Kühn, building and housing policy spokesman for the Green parliamentary group, declared: “The government has missed the goal it set itself to keep rents affordable.” He accused the government of indolence. “We finally need more social housing, an increase in housing benefits, the reintroduction of non-profit housing and a real rent brake.”

Given the ongoing housing shortage, it is no surprise that new rents are rising faster than inflation. Rents are skyrocketing, especially in large cities. A detailed comparison with inflation was not yet known.

The federal government wants to make the construction of affordable apartments attractive to investors with tax incentives, as it became known on Thursday. From the point of view of the Ministry of Finance, the special depreciation should apply to properties for which a building application will be submitted between August 31, 2018 and December 31, 2021, as stated in a draft law. The condition is that the manufacturing and acquisition costs do not exceed 3000 euros per square meter.

Real estate associations are calling for fewer state requirements

In addition, the grand coalition wants to tighten the rent brake for regions with tight housing markets. According to a draft law by Justice Minister Katarina Barley (SPD), landlords should have to justify before signing a contract if they want to add ten percent or more to the local rent.

In view of the new letting data, real estate associations renewed their call for fewer government regulations. “We need less regulation, accelerated approval and planning procedures and relief for the municipalities,” explained Klaus Peter Hesse, Managing Director of the Central Real Estate Committee. The association also calls for higher and permanent depreciation for construction costs.

Andreas Ibel, President of the Federal Association of Independent Real Estate and Housing Companies, complained that the rent increase was the logical consequence of growing construction and property costs and more and more government requirements and taxes. “The real estate transfer tax alone has been increased 27 times by the federal states since 2006.” Furthermore, energy saving requirements have been tightened 6 times since 2000. In order to limit the rise in land prices, municipalities would also have to designate more building land and make it available to investors at a discount.