German Student Property Rents Booming

Rents for German student properties are booming, with many overseas property investors taking advantage of increasing yields.

The latest study released by the Cologne Institute for Economic Research (IW) has shown that average prices for new student rentals particularly in large cities have increased significantly since 2010.

Berlin showed the largest percentage increase in German city student rents, with the rental cost for student housing rising by 70.2 per cent over the last seven years. Students in Berlin are now paying an average of €430 and around €11 per square metre of living space.

However, Berlin was certainly not the most expensive German city for students.

The Bavarian capital of Munich was found to be the most expensive city for students to live, with average rents for student flats reaching €665 per month and €18.4 per square metre. Prices rose by 53.1 per cent since 2010.

In second place came Stuttgart, with student rental prices reaching €14.9 per square metre, a rise of 62.2 per cent over the past seven years.

Frankfurt was the third most expensive city for students to reside in. Rental costs in the city have reached €14 per square metre, while Hamburg and Heidelberg both tied in fourth place at €12 per square metre.

Student rental costs in other major German cities have also risen greatly, with Cologne up 22.3 percent, Bonn (24.9 percent), Kiel (35.3 percent) and Leipzig (23.6 percent).

The east German university town of Jena had the smallest rise in rental costs with an increase of just 9.7 per cent over the same period.

The significant rental increase in German cities is attributed to many factors including the growing shortage of living space in desirable locations, and also because more and more rental apartments are being offered furnished, which drives up prices even further.

A steady increase in student numbers, coupled with new residents coming to the country and naturally migrating towards the major German cities has also contributed to the rise in rental costs.

It seems that overseas property investors buying investment properties in German cities will have a constant supply of available tenants.