Out of the city - a trend is consolidating

Even during the Corona crisis, it became apparent that people were increasingly turning their backs on the city. There are various reasons for this, including high prices and the shortage of housing in the city compared to a high quality of life and more space in the countryside.

Those living in a large city have to pay significantly higher rents than in medium-sized cities or in rural regions. Households in cities with more than 100,000 inhabitants paid an average net cold rent of 8.30 euros per square metre in the 1st half of 2022. This was 30 percent more than in small towns and rural communities, where the average net cold rent was 6.40 euros.

Rising construction interest rates are also having an impact on rents, new figures from the Institute of the German Economy show. "Two factors in particular are driving the development," says IW real estate expert Michael Voigtländer. "On the one hand, landlords are trying to offset the high inflation and compensate for it at least partially through their rental income. On the other hand, however, they are only succeeding because the rental market has tightened further: Those who previously wanted to buy can now often no longer afford property due to the high interest rates, so these people are now looking around on the rental market accordingly."

In 2021, large German cities with more than 100,000 inhabitants have lost as much population due to relocations as they last did in 1994. The number of people moving out of the district-free large cities to smaller cities and rural regions has risen by 1.8 per cent compared to 2019, while at the same time the number of people moving into the large cities has fallen by 5.4 per cent. This is reported by the Federal Institute for Population Research (BiB). The results prove a continuing and intensified trend towards suburbanisation in Germany.

The CBRE-empirica Vacancy Index 2022 suggests that the days of strong influxes into the core cities are probably over for the time being. This is shown not least by the migration of young families to the surrounding areas, which has been increasing for years, as well as a gradual decline in the rural exodus of students or people starting their careers. The lowest vacancy rates, with values close to zero, are in Munich, Frankfurt/M., Münster and Freiburg, as well as Ingolstadt.

(Graphic: © Federal Statistical Office, 2022)