According to HousingAnywhere's International Rent Index report for Q2 2021 shows an overall price drop for single rooms, bringing the average rental prices to their lowest point since 2015. The sharpest price falls were observed in Helsinki, where prices for single rooms have dropped by 11.8% to EUR 590, Rome, where prices have dropped by 10.4% to EUR 506, and Madrid, where prices have dropped by 10% to EUR 462.
At the same time, rental prices for apartments are rising fast throughout Europe. Rotterdam prices broke a trend of two years, showing a quarterly increase of 3.9% to EUR 1,344. Berlin saw a reversal of the controversial rent cap (Mietendeckel), which was ruled unlawful by the German constitutional court. A price correction can be seen in the German capital, with an increase of 10.6% to EUR 1,240. While in Q1 Madrid already showed a gradual positive price trend, this quarter sees an acceleration with a 5.3% increase to a monthly average of EUR 1,178.
Prices for rooms at an ultimate low
As a result of dropping prices during the pandemic, categories seem to be attracting new target audiences on the HousingAnywhere platform: more premium accommodation (including hotel rooms for short term rent) is now within reach of students and young professionals. This brings some temporary but much-needed relief to the market for single rooms. As a result, prices are dropping even further.
While this is mainly a result of local market dynamics, expats and international students are now also reaping the benefits: "This would be a good time for students and young professionals to start looking for accommodation abroad," says Djordy Seelmann, CEO of HousingAnywhere. "While prices for rooms are at an ultimate low at the moment, they are expected to start rising again once travel restrictions are lifted."
Top 5 most expensive cities for room rentals
1. Paris €694
2. London €658
3. Munich €646
4. Utrecht €637
5. Amsterdam €618
Apartment rental prices on the rise
The shift in categories results in climbing prices for apartments in most cities, as demand is increasing. In Berlin, rental prices are rising above those of Q4 2019 - right before the rental ceiling (Mietendeckel) was introduced to control rapidly increasing rents.
"Restrictive price measures, such as the Mietendeckel, offer no long-term solution, as we can now clearly see," says Seelmann. "Now that we see tourists returning to European cities, local governments should take decisive action to protect their residential housing stock. If cities are now complacent, they will see much of it returning to Airbnb and other holiday rental platforms. When the pandemic hit in 2020, we were appalled by how much local residential housing stock was tied up in holiday rentals for tourists. If cities do not plan to restore the balance between tourists and locals, local communities will lose out. Rental prices will rise if cities continue to allow housing stock to be rented out to tourists."
Top 5 most expensive cities for apartment rentals
1. Paris € 1,890
2. London € 1,691
3. Amsterdam € 1,605
4. Rotterdam € 1,344
5. Helsinki € 1,329