The HousingAnywhere International Rent Index reveals that all markets continue to witness an upward trend in Q2 of 2019, for the rental prices of single rooms, studios, and one-bedroom apartments alike. The increase this quarter was most notable in Barcelona, (showing an increase of 10.07% for apartments) and Vienna (with an increase of 5.85%). Whilst averaging at 960 euros a month for a one-bedroom apartment, Vienna still ranks among the major European cities with the lowest overall rental prices; but it is catching up with other international cities.
The Rent Index analyzes rental data from furnished private rooms, studios and one-bedroom apartments. This report focuses on the following European cities, which are popular among young professionals and international students: Barcelona, Berlin, Brussels, Madrid, Milan, Rotterdam, and Vienna.
Rental price index private rooms
Average monthly rental price for furnished private rooms.
Rental price index studios
Average monthly rental price for furnished studios.
Rental price index apartments
Average monthly rental price for furnished apartments.
1. Across the 7 cities indexed for rental prices, Barcelona displayed the biggest overall increase. In the past year, the city’s average apartment price has risen by 10.07%, studios by 7.17%, and private rooms by 0.76%. This means that, after the sharp increases of the previous year, prices now seem to be levelling out. 2. Rotterdam exhibited rising prices across the board, as compared to 2018: a 3.27% increase for apartments, 7.31% for studios and 6.5% for private rooms. With an average monthly rent of €1287, Rotterdam is the most expensive city in the HousingAnywhere International Rent Index. 3. Brussels remains one of the cheapest cities to rent in; however, as compared to Q2 of 2018, the Belgian capital did see a rental increase for all accommodation types: 2.93% for apartments, 8.99% for studios and 5.59% for private rooms. The high availability of housing, coupled with the flexible attitude of the municipality (regarding both project development and building transformation), ensures a healthy rental market, for tenants and landlords alike.
Rental Prices in European Cities are Leveling Out
While all markets saw rental prices increase once again in Q2 of 2019, the rise was considerably less steep than in previous quarters. Across all the cities indexed for rental prices, Barcelona has shown the biggest overall increase year over year. But looking at this past quarter, Barcelona is now among the cities showing the smallest overall increase.
Djordy Seelmann, CEO HousingAnywhere:
A ceiling is being approached, but this slowdown is not caused by a rise in the number of apartments, studios, and rooms on offer. There is still an urgent need for solutions that increase the number of apartments and rooms, to solve the European-wide problem of housing for young professionals and students. We already caught a glimpse of rental prices reaching a ceiling in the past quarter, but now the trend has been substantiated. Tenants are simply not willing or able to pay higher rents, even though the scarcity on the housing market remains concerning.
4. Though the German capital is no longer a contender for the top three fastest climbers in the International Rent Index, Berlin continues to show a rental increase, with prices for apartments rising by 6.13%, studios by 0.36% and private rooms by 5.77%.
5. Vienna saw a substantial increase in rental prices for apartments over the past year, by 5.85% no less. Additionally, the average price for studios has risen by 0.12%. Likewise, from Q2 of 2018 to Q2 of 2019, private room prices in Vienna increased by 6.12%. 6.Milan: while average rental prices for Milan have stabilized following a steep rise in Q1, the city’s prices have, nonetheless, increased; apartments cost 3.59% more than in Q2 of 2018, studios 3.72% more and private rooms 3.62% more. 7.While Madrid prices have been on the rise during the past year, they do appear to be stabilizing, with an increase of 3.91% for apartment prices, and just a 0.22% increase for studios. Prices for private rooms have risen by a modest 2.04%.
A rental cap is not a long-term solution
Following the news that Berlin was going to apply an ‘emergency cap’ to rent, the demand for such a measure grew in other European cities. In the Netherlands, the option is currently under examination by the House of Representatives, and the ‘emergency cap for middle segment rents’ is widely supported. But although a rental freeze could stop rental prices from increasing further, it does not change what is on offer, Seelmann thinks. In fact, it makes it less attractive for project developers and investors to build new houses and apartments:
If real estate developers earn less, the housing market becomes a less appealing investment option. We already see an effect on the number of real estate deals that are closed. According to the Europe Capital Trends report by Real Capital Analytics, the European average is down by 32% – its lowest point in six years. Stimulating new built remains the best solution to real-estate scarcity. In the shorter term, the re-development and -design of existing buildings can also offer some room for breathing. There is an urgent need for dialogue between the stakeholders – that is; tenants, landlords, property investors, and politicians. Only then can a long-term and sustainable solution for the housing market can be found.
About the HousingAnywhere International Rent Index
For this rent price index, HousingAnywhere analyzed 88,417 property listings, which were advertised on the platform between January 2018 and July 2019. To ensure the data is representative, properties that did not receive active interest from potential tenants, as well as listings that were considered outliers, were excluded. Properties deemed as too expensive or too cheap were not considered for this report as they threatened to skew the data. The report comprises cities that could provide a sample large enough for the data to be reliable. Data is shown only for single rooms in joined living arrangements, studios, and one-bedroom apartments.