Rental prices across all living property types have increased by an average 14.3% year on year, indicating that the imbalance between supply and demand has once again worsened this past year, according to the HousingAnywhere International Rent Index report for Q4 2022.
'The housing stock has not caught up with a world that increasingly turns mobile,' said Djordy Seelmann, CEO of HousingAnywhere. 'Rent prices are rising at a faster rate than inflation. Students and young professionals are putting their dreams on hold, as there is no accommodation available in the cities they wish to study in. While all this may sound pessimistic, it does not have to be. Once governments and municipalities get to acknowledge the roles ‘Accessibility’ and ‘Accountability’ can play, we will be a major step closer to enabling people to live how they want and where they want.'
When looking at QoQ increases (with an average of 3%), growth for the private rooms (6%) is significantly higher than studios (1%) and apartments (2%). This might suggest that the rent price of (available) apartments and studios is already near its peak and these types of properties may be out of reach in terms of affordability. On top of a general lack of availability, people may be driven into looking for private rooms as alternatives, which could explain why rent prices for rooms increased relatively more.
Looking Back on 2022
Q1 and Q2 of 2022 showcased record-breaking QoQ increases, pushing up the YoY average to a higher percentage. This ongoing trend kickstarted in Q3 2021 when mobility restrictions were gradually lifted. Moreover, peak season, which is historically not until Q3, was strongly witnessed in Q2 already, suggesting that the lack of availability pushed people to book their housing earlier than usual.
In Q3 and Q4, the QoQ increase slowed down a bit. This is a rather interesting trend, which suggests that if continued, the rate of increase may start to go down to a more moderate level in 2023.
Looking at the adjusted inflation of 9.3%, it is not a surprise that many European governments are taking restrictive measures to keep rent prices down. However, looking ahead, price-related restrictions to treat the symptoms (the rising rent prices) may not be the wisest course of action, the report warned. 'After all, it can even have a negative impact on the underlying cause, namely the structural lack of supply,' HousingAnywhere said.
Most Notable Changes
While Amsterdam has the highest absolute prices in Q4 of 2022 for each property type, with an average of €900 for single rooms, €1,950 for studios and a staggering €2,300 for apartments, this is the result of rents steadily rising for years and years. However, when looking at the changes in rental prices over the past year, Amsterdam is not even in the top three European cities, indicating prices have gotten so high, they are starting to level out.
Lisbon is leading on yearly increases for single rooms by 33.3%, followed by Berlin (28.4%) and Frankfurt (24%). For studio rents, Rome holds first place, seeing a year-over-year increase of no less than 45.8%, closely followed by Hamburg (44.4%) and Reykjavik (40.4%). Munich saw the steepest year-over-year rise in rents for apartments at 37.4%, while rents in Reykjavik increased by 31.6% and rents in Budapest by 29.6%. While these are worrying figures, they are the result of rental markets bouncing back to the pre-pandemic situation and continuing the trends where they left off.
