Rental prices in major European cities are on the rise, according to research by housing platform HousingAnywhere.
The HousingAnywhere European Rent Index revealed an upward trend for rental prices in the fourth quarter of 2018 compared to the year before for all major European student destinations. The rental data comes from furnished private rooms, studios and one-bedroom apartments in Barcelona, Berlin, Brussels, Madrid, Milan, Rotterdam and Vienna.
HousingAnywhere puts the increase in rental prices down to a growing shortage of available rental properties, rising competition among international students and young professionals to find ‘proper housing’, and more premium apartments being offered at higher prices.
In Q4 last year all markets saw an upward trend, with the most notable increases for one-bedroom rental apartments in Madrid, with a year-on-year rise of 6.27 %, and Barcelona, which saw an 8.7% increase. Vienna, by contrast, only saw an increase in monthly rents of 0.68% for one-bedroom apartments.
Prices for studios, private rooms and one-bed apartments are broadly similar in all the cities studied, with costs for a private room at their highest in Milan (€594.13) and lowest in Vienna (€451.93). For studios, meanwhile, the most expensive rental homes are in Barcelona while the cheapest are once again on offer in Vienna. In the case of a one-bedroom apartment, Rotterdam has the priciest rental homes while Vienna has the least expensive.
Year-on-year rental growth is comfortably at its lowest in the Austrian capital, with less than 1% growth for all types of rental properties. Much stronger growth has been seen in Barcelona, Madrid and Rotterdam, with steadier increases in Berlin, Brussels and Milan.
“Rental demand is currently outstripping supply in many popular cities for internationals,” Djordy Seelmann, chief executive at HousingAnywhere, commented.
“The increasing number of international students and young professionals, often looking for similar accommodation, has resulted in a lack of affordable housing for these groups. These times call for better coordination between supply and demand, so internationals can more easily find fitting housing, and landlords can get the maximum return from their property. To make all stakeholders aware of these developments, we have decided to launch the HousingAnywhere European Rent Report on a quarterly basis.”
Seelmann adds that, although some of the shortages in supply will be met by new housing provided by property developers in the coming years, it’s very likely shortfalls will remain in those destinations that are particularly popular.
With rents likely to keep rising, Seelmann says that more supply is needed to prevent price bubbles making it impossible for students and young professionals to find suitable housing abroad in the central regions of cities and in the vicinity of universities.
“It is important that cities take a long-term view of these market developments and act,” Seelmann concluded. “By developing more accommodation in central city areas, the rising demand for rooms, studios, and apartments can be met. Then the market will become more balanced, with sufficient and affordable housing.”
The full HousingAnywhere European Rent Index report is available for download on its website.