Cities across Europe face major surge in rents: Report

Rents have been on the rise in major cities across Europe amid continent-wide trends affecting all accommodation types, according to an international rent index for the third quarter of this year.

Following a reversal of the rent cap (Mietendeckel) in Berlin, apartment rents surged year-on-year by a striking 22.36%, followed by Hamburg with 19.94%, the Icelandic capital Reykjavík with 14.7%, and Milan with 14.36%, according to the HousingAnywhere International Rent Index report for the third quarter of 2021.

As the third quarter is usually the peak rental season for students, normalizing mobility for them, young professionals, and tourists, as well as shortages in rental accommodation have become "painfully evident once again, driving up prices even further," said the report.

BERLIN TENANTS FEEL HEAT OF RISING RENT

It is no wonder why thousands in the German capital took part in a demonstration last month against high rents and displacement.

The Social Democratic, Greens, and Left parties had introduced a rule freezing rents for some 90% of Berlin apartments at the June 2019 rates for five years. However, Germany's highest court struck down the cap on rent prices in April as unconstitutional and void.

POST-PANDEMIC TRENDS REVERSE

"Undersupply of accessible rentals felt less severe in 2020 due to short-term rental properties becoming available for longer-term rental on top of global mobility restrictions. However, as predicted, we now see a reversal of this trend as both holiday rental and mobility are reviving," said Djordy Seelmann, the CEO of HousingAnywhere.

Noting that rents across major European cities could rise, Seelmann said: "Shortages will become even more pressing once all travel restrictions are lifted, and municipalities should look for counteracting measures as soon as possible."

In the third quarter of 2021, apartment rent spiked the most, followed by studios and private rooms.

This may indicate a preference by tenants for more independent space, which could be a result of the pandemic.

As study and work spaces continue to merge with living spaces and social distance is being incorporated into people's lifestyle, private space tends to be appreciated more -- even though prices may not be as favorable.