• Total rent increases by an average of 10.9 percent
  • East Germany: additional housing costs around a third of the total rent

  • Lower-income households are particularly hard hit

  • A larger proportion of apartments are no longer affordable for families

Wiesbaden, December 13, 2022 – The development of energy costs in 2022 is extremely politically and socially explosive. Rising warm additional costs, continued increases in net cold rents and additional rising cold additional costs lead to an increase in the total rent of an average of 10.9 percent in the period September 2021 to September 2022. In regions with a low net cold rent level, additional residential costs now account for around a third of the total rent. These are the results of the current “ d.i.i. additional housing costs report”. For the third year in a row, the German Economic Institute (IW) has prepared a report on the hot and cold ancillary costs in 401 cities and districts in Germany on behalf of d.i.i. This year's focus was on additional heating costs.

“The additional housing costs have developed moderately in recent years. Now the additional living costs contribute a large proportion to the total rent,” says Frank Wojtalewicz, CEO of d.i.i. Deutsche Invest Immobilien AG. “This means that energy-saving renovations in existing buildings are becoming increasingly important. This means that additional costs can be reduced, which has a positive effect on the overall rent,” says Wojtalewicz.

Warm additional costs: Advance payments on average 48 percent higher
The advance payments for warm additional costs generally lag behind energy prices on the market. However, the analysis of apartment advertisements shows that they have been steadily increased over the past twelve months. On average and across all types of heating, the increase in September 2022 compared to the same month last year is a total of 48 percent. For apartments heated with gas, discounts rose by 56 percent and for heating oil by 43 percent. In absolute numbers, the additional costs for a 75 square meter apartment increase by 506 euros per year. If you heat with gas, the additional costs are 568 euros.

Cold additional costs increase by nine percent.
Cold additional costs have also increased in the past twelve months. They are driven by general inflation and higher labor and material costs. With an average of nine percent, they contribute significantly to the increased total rental costs. The net rent also increased, by six percent. Overall, there is an increase in total rent of almost eleven percent.

A larger proportion of apartments are no longer affordable.
The additional housing costs report also examined how the increased total rents affect the affordability of the apartments on offer. It turned out that a significantly lower proportion of the apartments on offer were still affordable for families and singles than a year before. However, the decline was greater for families than for singles. In both groups, households with lower incomes are particularly hard hit. Last year, the lowest-income 20 percent of families in half of the districts were still able to afford 37 percent of the apartments on offer with four or more rooms. This year it was only 28 percent – ​​a decline of nine percentage points.

“It is foreseeable that energy prices will remain high in the longer term. State support measures should focus primarily on the lowest-income households,” says Prof. Dr. Michael Voigtländer, head of the IW's financial markets and real estate markets competence area. “The rules for the modernization levy need to be adapted to the increased interest and construction costs,” said Voigtländer.

East Germany: Cold and warm additional costs around a third of the total rent.
The share of additional costs in the total rent is lower in the south and in large cities and their surrounding areas. This is due to the prevailing high net rents. However, in large parts of eastern Germany and rural regions with low net rent levels, additional costs make up around a third of the total rent, and on average for all districts it is even a quarter.

You can find the complete additional housing costs report here ->