According to the Greix index of the Kiel Institute of World Economics (IfW), in the last quarter of 2025, the requested rent in Germany increased by an average of 4.5% compared to the same period last year, outstripping inflation by two times.
In parallel with the price increase, there is a structural change in the market: an increasing share of ads is occupied by temporary and furnished housing. Such offers now account for 17% of all ads in the country. In the eight largest cities, this share reaches a quarter, and in Munich - a third of the total.
This trend exacerbates the problem of affordability, as furnished apartments in Germany are not subject to the law on limiting rent increases. Landlords can set any rate on them. "Put a chair in there, and that's it, the rental benefits are no longer valid. This is wrong," Berlin Mayor Kai Wegner (CDU) criticized this loophole, calling on the federal government to make changes.
The situation is also complicated by the record reduction in supply. In the last quarter of 2025, the number of rental ads dropped by more than 10%, and by about 20% compared to 2015. According to IfW project manager Jonas Zdrzalek, this not only creates difficulties for new tenants, including qualified professionals, but also changes the behavior of existing ones. Tenants are increasingly choosing to keep their current long-term contracts for fear of not finding an alternative. This, in turn, fuels the growing rental exchange market and further reduces the number of new offers.
Thus, the market is facing three problems: a rapid rise in prices, a shift to less secure forms of rental, and a chronic shortage of affordable apartments.
Source: I am an Expert
