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Rents are rising rapidly – buying now is cheaper than renting in Munich!
A current analysis by Von Poll shows rising rents and falling purchase prices in German A cities by 2025.
Rents are rising rapidly – buying now is cheaper than renting in Munich!
The real estate markets in major German cities show an exciting picture. An analysis by the Von Poll brokerage group reveals impressive trends in rental and purchase prices that affect both history and future developments. What is particularly noticeable is that rents are rising faster than purchase prices, which could mean a good deal for many property buyers. This is attributed to the period between 2020 and 2024, in which both rental and purchase prices were considered, with Cologne playing an interesting role.
The study shows that the rental-purchase price ratio in Cologne has now increased to 107.3%. This means that rental prices have risen proportionally more since 2020 compared to the incomes of Cologne residents. On the other hand, the ratio of purchase prices to income in Cologne has increased to 104.9%, which represents an increase but still offers room for increase for purchase investors. What is particularly striking is that purchase prices have fallen in many A cities, including Cologne. This draws attention to the fact that buying could now become more attractive, especially at a time when interest rates for building financing have fallen again, as test.de reports.
Price developments in the A cities
The increase in rental prices compared to income varies greatly between cities. In Berlin the rental-purchase price ratio is 124.1% and in Leipzig it is 111.7%. In comparison, Munich remains relatively stable at 103.8%, while Cologne lags behind. However, what emerges from the analysis is the trend that many people who traditionally rent are now considering making the move to purchase. This could become even more important as rental prices have increased in recent years - estimated by more than 5%, with peak values in cities such as Munich and Hamburg, where prices per square meter are sometimes over 30 euros, according to evernest.com.
On the other hand, purchase prices have stabilized, especially in the last few quarters. The decline and subsequent increase in purchase prices by an average of 0.7% in the fourth quarter of 2024 shows that the market is returning to normal after the highly volatile years of 2021 and 2022. Prices are now about 14.6% higher than they were four years ago. This gives buyers more room to negotiate and could encourage them to enter the real estate market.
Market development and conclusion
The developments in Germany are making experts and buyers sit up and take notice. Rents are expected to continue to rise rapidly, with a long-term increase of up to 24.4% since 2020. These figures suggest that the decision to buy a property could be a worthwhile long-term investment, especially for those who want to act with an eye on the future. However, according to focus.de it remains crucial that the Prospective buyers should keep a close eye on their personal financial options in order to make the right decisions with a good eye.