Best of five: A glimpse at rental prices in cities around the world

Rent, and, more specially, the lack of available rental properties, has been a hot topic in Ireland for many years.

In November, the Residential Tenancies Board (RTB) latest rent index showed that, nationally, the standardised average rent stood at €1,332 for existing tenancies compared to €1,574 for new tenancies.

Dublin, as ever, has the highest rents – the average rent in new tenancies for between April and June in Dublin was €2,102 per month. For existing tenancies during the same period, the average rent in the capital stood at €1,767 per month.

So, what of other cities? Five Irish Times foreign correspondents looked at rental prices and issues in their city, to get a snapshot of whether the rental crisis in Dublin is also experienced in other parts of the world.

Brussels

The average rent in Brussels is €1,188 a month, according to a barometer published by the Federation of Francophone Real Estate Agents. This is an increase of 3.3 per cent compared to the previous year.

The strongest growth was in the cheapest rental units, studios, which cost an average of €799 a month, an increase of over 9 per cent. The average house cost €1,698 to rent, which was a slight decrease compared to 2022. The average gross income in Belgium is €3,886 a month, according to the statistics office Statbel.

Belgium maintains an “indexation” of wages to inflation, which means that salaries rise automatically in line with inflation. However, other costs are also hiked in tandem: indexation also applies to rents. The government froze the indexation of rents of homes with a low energy rating in 2022 to bring relief to those struggling with the rising cost of energy prices, but this measure ended recently.

NGOs blame a lack of affordable and social housing for contributing to an increase in homelessness of 19 per cent between 2020 and 2022. More than half of the homeless population are non-Belgian nationals.

If a landlord wishes to sell a property, they can serve notice on the tenant to leave if this is permitted under the rental contract. Under a law passed in September, tenants have the first chance to buy a property they live in if it is put up for sale.

Tenants pay a guarantee of two to three months rent to cover any potential damage to the property before they move in. This is usually put into a “blocked bank account” that can’t be easily accessed.

The notice period on rental contracts differs depending on if they are for up to six months, for six months to three years, or for nine years. Long-term contracts can usually be terminated early if the landlord intends to move into the property or renovate it. The landlord is required to give the tenant six months’ notice or compensation, while the tenant must give the landlord three months’ notice for early termination. – Naomi O’Leary

Beijing

The average rent in Beijing in October was RMB6930 (€880) per month, according to the China Real Estate Association. The average monthly salary in 2021 was RMB16,792 (€2,134) according to the Beijing Statistics Office.

Rental prices have been falling and there is no current shortage of apartments, although rents are still high and hard to afford for those on lower incomes. With youth unemployment approaching 20 per cent earlier this year before the authorities stopped publishing the statistics, many live with their parents after they graduate.

Regulations for landlords are strict with steep fines for failing to uphold minimum standards and there is a ban on partitioning rooms to create more rental housing units. They cannot usually take more than the equivalent of one month’s rent as a deposit and it must be held in a third-party account.

Leases are usually for 12 months or two years and rent is usually paid in advance, quarterly. Landlords are generally not allowed to ask for more than three months’ rent at a time.

Landlords have the right to claim their property back in order to live in it but many rental contracts include a non-eviction clause that overrides this right. Local authorities have the power to impose a rent cap if they determine that market distortions are driving rents too high. – Denis Staunton

London

London’s rental market has been on a two-year bull run but may be nearing a peak. Rents are still rising fast but the rate of growth appears finally to be slowing. Demand for properties still far outweighs supply as landlords continue to quit the market due to galloping finance costs.

A recent report from the Greater London Authority cited data from property website Rightmove, which said the average new rent in London was £2,627 (€3,045) in the third quarter of 2023, up 12 per cent on a year before.

Renters in sought-after areas such as Kensington will pay an average of at least £3,600 (€4,173). Larger homes in family-oriented areas near schools are more highly prized. An average-sized four-bedroom home in a southwest London district such as Clapham or Balham will cost about £4,500 (€5,216) per month.

Annualised rental growth in London has been above 10 per cent every quarter for the last two years straight.

Flatshares are common among singletons. The average cost of renting a room in London was about £989 (€1,146) per month in July, according to data from spareroom.com. This compared to about £630 (€730) per month in the rest of the UK. The cost of a flatshare in London varies from about £832 (€964) in a northeastern area such as Walthamstow to £1,229 (€1,424) in trendy Camden.

High interest rates and escalating mortgage costs have driven many small landlords from the market, crimping supply in recent years and causing rents to soar. The first glimmer of hope for renters came in data from large estate agency Foxtons in September, which said it had 10 per cent more supply on its books that month compared to the same time last year. It still had 19 prospective renters for each property, however.

Landlords in London generally take a one-week rental holding deposit while references are checked for a prospective tenant. If the references check out, the holding deposit goes toward a security deposit on the tenancy, which is a maximum of five weeks rent for annual rents under £50,000 and six weeks for rents above that amount. Landlords are obliged to put the deposit in a government-approved holding scheme.

The government plans a Renters Reform Bill that would ban so-called “no fault” evictions, where landlords can ask a tenant whose original lease has run out to leave without giving any reason. – Mark Paul

Washington DC

The US capital is an expensive place to live, either to rent or to buy. Rental prices are slowing, but this comes in the aftermath of two years of double-digit growth following the Covid-19 pandemic. Prices, on the other hand, for all types of housing in the Washington region are climbing in some areas but falling in others.

As the centre for the US government and the military, as well as for many contractors, lobbyists, diplomats and media, it is a magnet for workers both from across the United States and abroad. The unemployment rate in the Washington metropolitan area is less than 3 per cent.

Across Washington DC, the housing stock consists mostly of apartment units – about 130,000 – followed by single-family homes. Most apartments for rent come unfurnished. Those that are furnished can be harder to find.

According to the Apartment List report for November 2023, the overall median rent in the city stands at $1,882 (€1,724) across all sizes of accommodation. This is down 0.9 per cent over the last month. But rent prices overall are up 0.4 per cent, year on year.

Across the city, the median rent currently stands at $1,839 (€1,685) for a one-bedroom apartment and $1,817 (€1,664) for a two-bedroom unit. – Martin Wall

Berlin

About 85 per cent of Berliners rent their home, far higher than the German and EU averages of 53 and 30 per cent respectively, though the trend towards home-ownership is growing. The average rent has jumped 60 per cent in the last decade compared to a 50 per cent rise in average earnings.

Alongside the housing shortage, a driver of property prices is a new breed of professional investors, domestic and foreign. Many sought a safe haven for capital in the euro crisis and seek higher rent returns through evictions and legal loopholes through modernisation measures. In some eastern areas of Berlin, the rate of population exchange in the last 20 years is over 90 per cent.

On paper at least, tenants in German enjoy high levels of protection. Rents can only increase 15 per cent over a three-year period. Some have staggered rental increases included in the contract. Tenants must give landlords three months’ notice they are leaving, regardless of how long they have lived in an apartment or house. The notice period for tenants from landlords begins at three months and, after five years, rises to six months. After eight years it rises again to nine months.

The arrival of institutional investors in the last decade has seen a rise in creative – and often devious – efforts to break contracts or undermine, tenant security. Popular methods include tenant cash buy-outs as well as initiating long-running and/or deliberately-botched renovations, causing flooding or heating outages. Other landlords dispose of tenants by reclaiming their apartment for personal – or family – use. Others have discovered legal loopholes to earn more money with fixed-term rental contracts or furnished apartments – neither of which fall under traditional tenant protection laws.

Growing price pressures saw the Berlin city government impose a five-year rental cap in November 2020, reducing rents to levels in district registers. Just six months later, however, the cap was dismissed on constitutional grounds and around 330,000 tenants in overpriced apartments, who benefited from lower rents, had to pay back any back-rent. The short-lived cap had an unintended secondary effect: the rental market froze up as landlords held off renting vacant properties.

Berlin is increasingly becoming a two-tier rental market: with long-term tenants enjoying historically low rents in unbreakable leases and new arrivals paying record prices with little or no security.

English language city magazine Exberliner recently ran a long reportage on what, anecdotally at least, is a growing phenomenon of sublets. The author of the article had “bounced through 28 apartments since moving here in 2018″ and interviewed others with similar tales of the growing – and largely unregulated – sublet market. Price rises have gone hand in hand with waves of gentrification in popular city districts such as Kreuzberg and Neukölln, for decades the home of Turkish and Arab immigrant communities and who now find themselves squeezed out to outlying districts. – Derek Scally

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