Rents ease, supply vanishes — Germany's rental market still hollowing out

Asking rents across German cities rose at their slowest annual pace in more than four years in the first quarter of 2026, according to the latest GREIX Rental Price Index published by the Kiel Institute for the World Economy — but the headline moderation masks a structural transformation in the rental market with significant implications for both tenants and investors.

According to the GREIX index, which tracks quality-adjusted asking rents across 37 German cities and regions using hedonic regression methods applied to more than 60,000 listings per quarter, nominal rents rose by 0.5% quarter-on-quarter and 2.9% year-on-year in Q1 2026. That annual growth rate is the lowest since Q4 2021, and represents a sharp deceleration from the 4.5% annual growth recorded in Q4 2025. Adjusted for inflation, rents fell slightly by 0.1% compared to the previous quarter. "The market remains fragmented, with large differences between cities," said Jonas Zdrzalek, GREIX project manager at IfW Kiel.