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Residential Real Estate Leases - Germany

Germany

In Germany, the Residential Real Estate Leases market market is anticipated to witness a substantial growth in the coming years.
According to projections, the revenue of this market segment is expected to reach a staggering €216.20bn by 2024.
Among the various subcategories within this market, Apartment Leases holds the largest share, with a projected market volume of €169.70bn by 2024.
Looking ahead, the market is forecasted to maintain a steady growth trajectory, with an estimated annual growth rate (CAGR 2024-2029) of 1.86%.
This consistent growth is anticipated to lead to a market volume of €237.10bn by 2029.
The resilience and potential of the Residential Real Estate Leases market market in Germany is evident, reflecting a promising future for this segment.
The demand for residential real estate leases in Germany has seen a significant increase due to the country's stable economy and high standard of living.

Key regions: Japan, China, Australia, Germany, United States

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Analyst Opinion

The Residential Real Estate Leases market in Germany has seen significant development and growth in recent years.

Customer preferences: Customers in the Residential Real Estate Leases market in Germany have shown a strong preference for long-term leasing options. This is due to the stability and security that long-term leases provide, allowing tenants to establish a sense of permanence and stability in their living arrangements. Additionally, customers in Germany have also shown a preference for properties that offer a range of amenities and services, such as fitness centers, parking facilities, and communal spaces. These amenities enhance the overall living experience and contribute to the attractiveness of the property.

Trends in the market: One major trend in the Residential Real Estate Leases market in Germany is the increasing demand for sustainable and energy-efficient properties. Customers are becoming more conscious of their environmental impact and are actively seeking properties that prioritize sustainability. This trend is driven by both government regulations promoting energy efficiency and customer demand for environmentally-friendly living options. As a result, property developers and landlords are investing in energy-efficient technologies and sustainable building practices to meet this growing demand. Another trend in the market is the rise of co-living spaces. Co-living spaces offer shared living arrangements, where tenants have their own private bedrooms but share common areas such as kitchens and living rooms. This trend is particularly popular among young professionals and students who value the social aspect and cost savings of co-living. The demand for co-living spaces is driven by the high cost of living in major cities and the desire for a sense of community.

Local special circumstances: Germany has a strong rental culture, with a significant portion of the population opting to rent rather than buy property. This is due to a variety of factors, including strict lending requirements, high property prices, and a preference for flexibility. The rental market in Germany is highly regulated, with laws in place to protect tenants and ensure fair rental practices. This provides a level of security and stability for both tenants and landlords.

Underlying macroeconomic factors: The strong performance of the German economy has contributed to the development of the Residential Real Estate Leases market. Germany has a stable economy with low unemployment rates and strong GDP growth. This has led to increased disposable income and a higher demand for rental properties. Additionally, low interest rates have made it more attractive for investors to enter the real estate market, leading to increased construction and development of rental properties. In conclusion, the Residential Real Estate Leases market in Germany is developing in response to customer preferences for long-term leases, sustainable properties, and co-living spaces. The local special circumstances, such as the strong rental culture and regulated rental market, further contribute to the market's growth. The underlying macroeconomic factors, including the strong German economy and low interest rates, also play a significant role in the market's development.

Methodology

Data coverage:

Figures are based on total and average revenue of residential apartment leases.

Modeling approach:

Market size is determined by a bottom-up approach. We use national statistics, international organizations, and industry associations to analyze the markets. To estimate the market size for each country individually, we use relevant key market indicators and data from country specific industry associations such as GDP, price level index, household wealth, household size, number of renter and owner households, housing consumer spending per capita.

Forecasts:

We use a variety of forecasting techniques, depending on the behavior of the market, for instance, exponential trend smoothing. The main drivers are GDP per capita, population, number of renter and owner households, price level index, housing consumer spending per capita.

Additional Notes:

Data is modeled using current exchange rates. The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war considered at a country-specific level.