It's that time again: A new rent index is being published in Berlin.
This is actually redefined every two years, but it has now been three years since a qualified rent index has been in place in Berlin. Currently, only a "simple" rent index applies. Why? Due to political inconsistencies, there was no valid data basis for publishing a qualified rent index in 2023.
These are now available. And the data collection will soon determine the maximum basic rent that can be charged for rental apartments in Berlin in 2024 and '25.
In concrete terms, this means that we now have to deal with the following questions:
- To what extent will the new rent index 2024 affect rents?
- Do landlords have to adhere to the rent index?
- What are the consequences of the change for landlords?
- What opportunities does the rent index 2024 offer property owners?
You can read the answers to these questions now.
Simple vs. qualified rent index - what's the difference?
Both the qualified and the simple rent index help to determine the local comparative rents. Both create transparency on the housing market. However, the approaches to determining the rent index are different:
A qualified rent index is based on systematic data collection, which is then analyzed scientifically. This data is collected every two years from the current rental market.
A "simple" rent index is based on an index update that has not been subjected to any scientific analysis. Past data collections are used to make assumptions and forecasts about the development of local comparative rents.
The data collection for the new Berlin rent index began in September 2023. began. To this end, surveys were conducted in which tenants, landlords and housing companies were asked to provide information about their rent and amenity situations. The responses will be evaluated by the independent research and consulting institute ALP-Institut and will ultimately define the upcoming Berlin rent index 2024.
The key factors in rent pricing in Berlin
The local comparative rents and thus also the rental prices in Berlin are determined by various factors, including
- Location and infrastructureDistricts with good public transportation connections, proximity to educational institutions, shopping facilities and cultural offerings can demand a higher basic rent.
- Equipment and condition of the propertyModern and well-maintained apartments generally command higher rents.
- Market demand and supplyThe correlation between the two factors is self-explanatory.
- Demographic developmentsFactors such as population growth, age structure and migration trends also influence rental prices.
- Economic conditionsThe general economic situation and the income development of the population of our capital also play a role in determining rental prices.
Practical effects of the rent index 2024 on Berlin landlords
Now we come back to the initial questions:
- To what extent will the new rent index 2024 affect rents?
- Do landlords have to adhere to the rent index?
- What are the consequences of the change for landlords?
- What opportunities does the rent index 2024 offer property owners?
The fact is that the new rent index in Berlin is causing uncertainty. We would like to get rid of this.
In general: Does the rent index influence Berlin rents?
In general: Yes. The rent index serves as a guide to fair rents, both for landlords and tenants.
The adjustment this year can therefore lead to both an increase and a reduction in rents. Based on two perspectives, this means
- The landlord's perspective
Landlords are allowed to increase the rent on their properties every 3 years - but not by more than 15 % - 20 %. This is called the "rent cap".
The rental agreement must also be observed. Other agreements apply for graduated or index-linked rents.
There are also exceptions for modernization work on property.
You probably know the answer: "It depends". This is also the case here. If you still have questions or doubts, seek advice. You can find initial answers in our FAQ for landlords.
- Tenants' perspective
The qualified rent index ensures greater transparency in rental prices. If the tenant is of the opinion that their rent is significantly higher than the local comparative rent, they can lodge a complaint.
Also relevant: If an apartment has significant defects, rent reductions can be claimed.
A rent reduction is therefore only indirectly prescribed by the Berlin rent index. Rather, it is initiated by enlightened tenants.
And now: Do landlords have to adhere to the rent index?
Landlords are not legally obliged to adhere to the rent indexbut it is often used as a reference in rental disputes. The rent index provides landlords with guidance on reasonable rents and helps tenants to protect themselves against excessive demands.
More specific: Current trends and forecasts for landlords
Landlords should therefore be prepared for changes in the price structure, especially in districts with strong growth. Based on data from 2023, Berlin apartments in the lower-priced (up to €9 cold rent per square meter & month) and mid-priced apartments (€9-15 per square meter) are highly contested. Demand is particularly high in districts such as Steglitz-Zehlendorf, Mitte, Lichtenberg, Friedrichshain-Kreuzberg and Neukölln.
Of course, this means that the high demand and low supply of rental apartments could drive up rents in Berlin in 2024. Which in turn may be reflected in the new rent index.
Note: You know that energy prices in Berlin went through the roof in 2023. So perhaps you have become more involved with modernization measures and energy energy management of your property. The energy efficiency of your condominium will continue to have an increasing influence on rental prices in 2024 ... and demand!
However, this outlook is nothing new. Statistics visualizing the development of rental prices were only published in Q4 2023:
Berlin is listed in second place here. However, it is also interesting to note that Berlin is not far ahead of other major cities. The trend in price developments - for asking rents - will therefore certainly continue in 2024.
What opportunities and challenges does the new rent index in Berlin present for property owners?
Every innovation requires commitment by familiarizing yourself with the changes. Are you still reading our article? Great! Then you've already acquired a foundation!
And we can summarize the newly acquired knowledge about the rent index 2024 in Berlin once summarized.
Opportunities that 2024 offers:
- More legal certainty: clear guidelines allow owners to adjust their rents on a sound legal basis.
- Rents in line with the market: The qualified rent index enables a fair and market-oriented rent determination that reflects the real value of the properties.
- Long-term planning: The precise data from the rent index supports owners in strategic planning and increasing the value of their properties.
Challenges that the new rent index in Berlin may bring:
- Adaptation to new framework conditionsThe familiarization with the new specifications of the rent index initially requires time and effort.
- Communication with tenants: Changes to the rental structure must be communicated to tenants in a transparent and understandable way.
- Monitoring market developmentsOwners must monitor the real estate market in order to adjust their rental prices appropriately. This is particularly important for new lettings.
Both opportunities and challenges may result in additional expenses this year. additional expenditure in property management with it. It is difficult to maintain an overview and then determine how to deal with the changes. Especially if you, as a landlord, do not regularly deal with the Berlin rental landscape.
But there is a trick for this: Get advice!
You have read our entire article. That's quite a lot of input! If you still have questions, write them down - and contact us without obligation.
We are still in January 2024, so this is the perfect time to prepare for the new rent index nowwhich is due to take effect in spring. No, you don't have to check the market situation. We do that for you - every day. And help you achieve your real estate goals in Berlin in the long term.
