It is almost an impossible task to declare everything fully let when managing a portfolio of rental properties with ongoing move-ins and move-outs, but EgnsINVEST Ejd. Germany has on several occasions come close.
EgnsINVEST Ejd. Germany has issued the third and final edition this year of the shareholder magazine BERL!N. In this connection, the property company has focused on its low vacancy rate, all the way down to 0.67%, which indicates very few vacant apartments, a trend that has been consistent over the past five years.
One of the reasons is that the company has good homes in attractive locations, but the low vacancy rate can also to a large extent be attributed to the very high demand for housing in Berlin. Especially in the low and mid-price segments, waiting lists quickly form when apartments are advertised on the major online rental platforms.
The natural question, therefore, is why more housing is not being built in Berlin to support the strong demand. The short answer is that more housing is indeed being built, but too little and too slowly. The number of new homes cannot keep up with the growth in population, and construction has been lagging behind for more than 10 years. During the same period, prices for both building land and construction materials have soared. Demand has therefore not diminished, which the company’s vacancy figures clearly show. For example, over the past five years the vacancy rate has been below 2%, with a clear downward trend.
A report from the Institut der Deutschen Wirtschaft has presented a forecast looking all the way to 2040, and according to this, it does not appear that this trend will change any time soon. It emphasizes that even by then Berlin will still not have achieved a balance between supply and demand in the housing market. The rental housing sector in Berlin therefore looks set for stable and solid operating income in the coming years as well, and perhaps at some point EgnsINVEST Ejd. Germany may in fact succeed in having everything fully let.
You can find the latest edition of the company’s shareholder magazine on their website.