Rental prices in Germany: Development and forecast (2025)

The fact that living in Germany has become expensive no longer only feels big city dwellers – but it is particularly hard in the cities.

Rents have been increasing continuously for over a decade, whether in Munich, Frankfurt or Leipzig. And it doesn’t look like this development would soon relax.

On the contrary: The market is tense like rare, while the range of affordable living space is becoming increasingly scarce. The causes are diverse – and therefore so difficult to solve.

The review shows what has long been a reality

Between 2010 and 2024 the net rents in Germany rose on average by 64 %.

This is particularly drastic in the big cities: Berlin, Hamburg, Munich – here prices today are significantly higher than the nationwide means. The rental price index of the Federal Statistical Office was 107.5 points in 2024-that is 7.5 % more than 2020. And this trend is not new: From 2005 to 2022, rents in the top cities rose by 21 %, inflation only 13 % in the same period. So living became noticeably more expensive, also real.

An exciting point is the difference between existing and offer rents. In 2022, the average price for newly advertised apartments was € 9.66/m² – while existing tenants still came away with around € 7.28/m². This rental price scissors shows how high the pressure on the market is: If you move or seek new, you almost automatically pay it. Especially in regions with strong demand.

Regional differences in rental price development in Germany

While you can still live in the country for 6 to 8 euros per square meter, the reality in the cities looks very different.

In the 14 largest German cities, the average rents in 2023 were € 13.43/m². Munich? € 22.08. Frankfurt? 19.17 €. Berlin? 18.18 €. And these are just the average values ​​- in popular districts or new buildings you can quickly lie above it.

Central cities are also following: Freiburg is now € 17.04, Heidelberg at € 16.20. Cities like Leipzig have experienced rental boards of around 45 % in the past four years. Even smaller cities are not spared – especially if they are economically attractive or accommodate universities.

Price increases continue

In the fourth quarter of 2024, rents rose by an average of 4.7 %in Germany.

Some cities stand out even more clearly: Berlin increased by 8.5 %, eating 8.2 %, Frankfurt by 8 %.

The development is particularly accelerated in the new building segment: Leipzig +12.7 %, Stuttgart +11.7 %, Cologne +11.1 %. Munich is now scratching the 25-euro brand in new rentals, condominiums now cost an average of over € 8,000 per square meter.

Rental price development in Germany: rents are increasing the most here

The location on the rental market is not only tense – it is literally explosive.

As always, Munich is at the top of the list, but other cities are now running the race at the pace. While the Bavarian capital is stagnating in the new building at € 22.08/m² (still insane), Berlin pushes tremendously with an annual increase of 8.5 %. Frankfurt, Leipzig or cities such as Essen and Neubrandenburg also follow up with double -digit growth rates – sometimes completely under the radar.

Above all, exciting: it is no longer just the big players. Central cities also increase vigorously – keyword displacement from the metropolitan areas.

Here are the most important cities and developments in direct comparison:

The message is clear: living not only becomes more expensive, but more expensive.

Not only in the metropolises, but increasingly also in smaller cities. Anyone who thinks they can escape the whole thing through the surrounding area must now also count on rent from € 8 to € 10/m². And if it continues, center cities will soon crack the 15 mark.

Why do rents in Germany rise so rapidly?

The biggest problem remains the same: too little is being built. In 2024, only 260,000 new apartments were created nationwide – the political goal was 400,000. For 2025 you expect less, only 150,000 to 200,000 units. At the same time, the population continues to grow, especially in cities: Hamburg increased by over 60,000 inhabitants from 2020 to 2025. And the building land remains scarce.

There are also exploding construction costs: Material prices have risen by 34 % since 2021, wages in the construction industry by 18 %. So if you build today, you pay much more than a few years ago – which of course struggles to rents.

Investors also drive the prices: 23 % of residential properties of foreign investors belong in Munich. They expect returns between 4 and 6 % – twice as much as in some other city. This leads to even higher rents, especially in the upper segment.

And political? A lot of talk, little effect. The rental price brake is to be extended, but is fixed in Berlin. Without clear legal regulations, Appeals remain with fairness – which have little effect on a market with a close offer.

Who suffers the most from the development of rental prices?

Clearly: households with low income. In 2021, the lower 20 % of households spent over 35 % of their income for rent.

The upper 20 %? Only around 20 %. In Munich, the rent for a shared apartment now devours more than half of the Bafög maximum rate. And an average of 2,371 euros a month for rent and lifestyle – with an average net income of 2,137 euros. That no longer fits at the front and back.

Gentrification also becomes a problem: In districts such as the Glockenbachviertel in Munich, rents have doubled within ten years. The proportion of low -income households fell from 28 % (2015) to 12 % (2025). The city center loses its social mix – and this is not a purely Bavarian problem.

Forecast for rent development: What can we expect in the next few years?

If nothing happens: further rent increases.

Leg, Vonovia and other large landlords expect between 4 and 5 %with price growth in 2025.

The nationwide rental price index should increase to € 11.40/m². An average apartment with 69 m² then costs 786.60 euros – cold. Warm rent beyond the 1,000 euro mark become normal, not an exception.

What should happen?

Some ideas are on the table:

• Build more – and quickly. The IBA 2027 tests wooden buildings that should be 30 % cheaper.

• Floor reform – A speculation tax on undeveloped land could mobilize building land.

• More funded living space – For example, based on the model from Switzerland: 25 % social housing rate by cooperatives.

• Changed life models – Community living, Tiny Houses or more densification.

But: Many of these solutions fail because of the political will or legal framework. Germany is hesitant in particular in the protection of ownership – compared to Vienna or Zurich, there is a lack of municipal freedom of action.

Conclusion: The German real estate market – a powder barrel

The current development on the rental market is not a snapshot, but the result of years of structure problem.

The mixture of growing population, a lack of living space, expensive new buildings and political inactivity means that the gap between poor and the empire continues to open – and living becomes a social focus. If nothing changes, we are facing an even deeper crisis. Because what happens if nurses, teachers or trainees can no longer afford life in the city?

Then the whole system tilts. And right now we are standing.

FAQ: Development of rental prices in Germany

How do rental prices develop in Germany?

The rental prices in Germany have been increasing significantly for years – especially in the big cities. Between 2010 and 2024, the net rents increased by a whopping 64 %. In 2024 alone, the nationwide rental price index was 107.5 points- an increase of 7.5 % compared to 2020. The distance between existing and new rentals is getting bigger, and during rural areas at € 6–8/m², the metropolises have long been over € 20. In short: the trend clearly points upwards – and an end is not in sight.

How do rental prices 2025 develop?

Experts assume further increases for 2025. Large housing groups such as Vonovia or Leg are planning increases by 4–5 %. In cities such as Berlin, Frankfurt or Leipzig, prices could rise even faster – sometimes in double digits. The demand remains high, the new building is lagging behind, and the interest is no longer cheap. The forecast for 2025: An average square meter price of around € 11.40 throughout Germany-that is almost € 800 rent for a normal 70 m² apartment.

How high will rents increase in 10 years?

If the dynamic continues as before, an increase of 30–50 % by 2035 is quite realistic – especially in coveted cities. In Munich, Berlin or Frankfurt, living could then become a real luxury question. And center cities like Leipzig or Freiburg also catch up rapidly. The long -term drivers: population growth, shortage of building land, high construction costs and far too little new building. Without countermeasures, the rental load for broad sections of the population becomes a permanent problem.

Will rents increase in the future?

In short: yes – pretty sure. The market remains tense. In 2024, only 260,000 new apartments were built, although 400,000 would be needed. For 2025 it looks even worse with a maximum of 200,000 units. At the same time, the cities continue to attract people, construction costs are increasing, and many new buildings end up in the high -priced segment. Even structurally weaker regions such as Neubrandenburg or Rheine are now reporting double -digit growth. Conclusion: Without new building offensive and real soil reforms, rents will continue to climb – nationwide.