Germany housing market sees rise in furnished short-term rentals

Recent studies from 2026 indicate that furnished, short-term rental housing is no longer a niche segment in Germany, particularly within major metropolitan areas. An evaluation by the Institute for Housing and Environment (IWU), commissioned by the Federal Ministry for Housing and the Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR), found that by the end of 2024, more than one in three rental listings in cities with over 500,000 inhabitants were for furnished or limited-term accommodations. This is a significant increase from 2012, when the figure was approximately one in seven.

Between 2012 and late 2024, the average asking rent for furnished temporary housing rose by more than 80 percent, exceeding 27 euros per square meter. Researchers suggest some landlords may be shifting unfurnished inventory into the less regulated furnished segment to bypass rental restrictions.

Additionally, research into German urban markets highlights a growing divide between 'insiders' and 'outsiders.' Due to rent regulations, existing tenants benefit from stable, low-cost old contracts, creating a 'lock-in effect' where they remain in unsuitable housing to avoid high market rates. Meanwhile, 'outsiders'—such as young families and professionals—face a shrinking supply and significantly higher prices for new rental contracts, with price gaps in large cities reaching up to 50 percent.