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Shortages on European Rental Markets Returning to Pre-Pandemic Levels

The latest HousingAnywhere International Rent Index report for Q3 2021 shows an overall trend of increasing rents for all accommodation types (apartments, private rooms and studios), with apartments showing the steepest increases. After a reversal of the rent cap (Mietendeckel) in Berlin, apartment rental prices in the city recorded the sharpest year-on-year increase, up 22.4%, followed by Hamburg (19.9%), Reykjavík (14.7%) and Milan (14.4%).

As the third quarter is usually the peak rental season for students, an increase in rental prices was to be expected. However, as mobility is normalising for both students, young professionals and tourists alike, shortages in rental accommodation have become painfully evident once again across Europe, driving up prices even further. Even the Spanish and Italian cities are seeing rental prices rapidly rise, after some notable drops in the previous quarters. This signals that the two European countries are also now recovering.

Djordy Seelmann, CEO at HousingAnywhere, said: “Shortages will become even more pressing once all travel restrictions are lifted, and municipalities should look for counteracting measures as soon as possible.”

The situation is especially dire in major European university cities, with some universities even reporting students dropping out or deferring their studies due to challenges in finding accessible accommodation.

Seelmann added: “There is an urgent need for more accessible housing for students and young professionals, especially in those cities that are attracting internationals. Unfortunately, development of new residential property is not a simple matter, and even with the right permit, it normally takes years to be completed and available. Therefore, we urge policy makers to critically assess current housing and rental policies to find solutions that can immediately address this problem. For example, governments should take action right now to prevent the residential housing stock from returning to the short-term holiday rental industry. In addition, repurposing vacant commercial buildings to residential use with a proper permit can be accelerated.”

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