Rent rising: Stuttgart, Cologne and Leipzig in the focus of the 2025 living market

Rent rising: Stuttgart, Cologne and Leipzig in the focus of the 2025 living market

challenges on the housing market: A look at rental price development in Germany

11.04.2025 - 08:01

Immoscout24

The German housing market shows itself in a dynamic upward trend at the beginning of 2025, especially in the big cities. The demand for rental apartments in urban centers is still strong and has increased by up to +6 percent compared to the previous year. Developments in cities such as Cologne, Leipzig and Stuttgart are particularly remarkable, where both rents for existing apartments and new buildings have experienced a significant increase.

A central aspect of this rental price development is the pressure on affordable living space, which increasingly puts the rental seekers under stress. Dr. Gesa Crockford, the managing director of immoscout24, emphasizes: "The rental markets in our metropolises continue to have a high level of adaptation. Cities like Cologne and Leipzig are experiencing significant growth of the offer, especially in the new construction projects." This dynamic is not only a sign of economic growth, but also illustrates how important it is to increase the availability of living space.

Despite these growing challenges, a focus is on unknown cities. These areas show an annual increase in demand of +7 percent, which means that they can show positive development compared to rural areas, which records a small decline of -3 percent. These figures illustrate the postponement of housing requests from the population to urban and urban surroundings, where the quality of life and the accessibility of services play a greater role.

The developments regarding rental prices in the new building are quite meaningful. While the nationwide offer rents grow by +1.5 percent, cities such as Cologne and Leipzig stand out, which have growth of +2.4 percent or +2.3 percent in the new building segment. This inflation is a symptom for the ongoing trend towards urbanization, where the range of new apartments does not keep up with the high demand.

If you look at the new letting in the inventory, it is striking that Stuttgart in particular stands out in the first quarter with a rental price increase of +1.9 percent. This is particularly relevant because the city has now reached the highest rental rent among the eight German metropolises. This price increase is another indication of the growing stress on the real estate market in Germany. In Berlin and Munich there are also trends of rising rental prices, but with larger discrepancies between the requested and the actual offers - this leads to an unsettled market in which many people interested in rent have to find suitable living space.

In order to meet these challenges, increased new building activities are necessary. The framework conditions for housing must be improved in order to meet the steadily growing needs of the population. The current state of the rental market in Germany is not only an immediate problem for the tenants, but also raises questions about future visions for urban living. A balanced relationship between supply and demand is of central importance to secure the quality of life in urban areas.

Overall, the current rental price development in Germany shows the need to dynamize housing construction and at the same time ensure more financial affordability. The balance between the development and maintenance of the quality of life will be one of the central challenges for politics and business in the future.