As part of a series of specialized research that the Expert Analytical Association “Sovereignty” has been conducting, we are studying housing costs and rental policy in Germany.

In addressing this topic, we have the professional commentary of Prof. Dr. Tobias Just, who, in addition to his accredited prestige as a specialist in the international real estate sector, is Managing Director and Scientific Director at IREBS Real Estate Academy.

Professor Just told us the following:

Rents (in most German conurbations) have been rising faster than incomes due to two main reasons: (1) immigration has been strong from 2015 to 2024. This has not only been asylum seekers, but also labour migration. Most of this international migration targets core cities. Given that North-Rhine-Westphalia is the most densely populated region in Germany and given that this region has been home to many international migrants the area profited from these migration trends. (2) at the same time construction activity was low; too low with regards to population growth.

At the same time, a significant share of international migration was low-skill, ie. Earnings potential was sub-par, wages could not rise due to migration. And as international competition has intensified for many manufacturing products (machinery, cars, chemicals..) income growth could not pick up.

This means, rental growth exceeded income growth due to housing market and due to labour market trends in the last few years.