"The demand for furnished housing, especially in cities like Berlin, has been growing steadily since the pandemic"

by Spotahome

Marie-Kristin Jahn, Senior Business Development Manager German Market

1. The German rental market has been very dynamic recently. How has Spotahome been received by local landlords and tenants lately?

We have indeed been experiencing a sharp increase in rent prices in Germany lately, both in the furnished and the unfurnished sector. In spite of this development, the demand for furnished housing especially in cities like Berlin has been steadily growing since the pandemic.

According to our data, around 85% of Spotahome tenants are international young professionals and students, who are looking for temporary accommodation in Germany. Furnished housing is regarded as a “convenience product”, where the tenant accepts a surcharge in rent in order not to have to worry about procuring furniture, ancillary costs and other equipment in return. Saving time is more important than saving costs in these cases and is therefore the decisive factor when choosing an apartment.

In addition to the general increase in demand for furnished housing, Spotahome has been able to further penetrate the market with its 100% online rental process that guarantees both tenants and landlords a secure renting experience from start to finish. Spotahome guarantees every tenant and landlord their full support, fraud protection and secure payments, among other things. It is thanks to this unique digital process and its guarantees that Spotahome has been able to become a major player on the German market and successfully manoeuvre through the pandemic.

2. How did the caps on rental prices affect cities like Berlin? Shortly after it was declared unconstitutional

The cap on rental prices in Berlin was declared unconstitutional in April 2021, meaning that the reduced rental prices that landlords had been forced to collect were actually illegal.

As a precautionary matter and in anticipation of such an event, many landlords had included a so-called “Schattenmiete” clause into their lease contracts. Those clauses enabled landlords to assert the outstanding claims against their tenants in case the rental cap was to be declared unconstitutional. While some of our landlords later decided to enforce the clause, others did not.

Even though the cap is not in effect any more,  there is still a nationwide rent control law that German landlords do have to comply with. In many cases however, this law does not necessarily affect furnished temporary housing. Moreover these rooms and apartments are  usually rented with all utilities bills included. It is mostly these two factors we have to consider when talking about increased rental prices in cities like Berlin, where demand is skyrocketing and supply is short.

3.  What factors are most important to you when it comes to opening a national market ?

Knowing the local market and its peculiarities is key to success:  Unlike in other European Countries, furnished rentals are not yet common in Germany. In many cases landlords are not even required to provide a functioning kitchen.

With the rise of international mobility and digitalization, our data confirmed that there was a good potential for our products in Germany. So after identifying, grouping and prioritising our target groups, both on the landlords and the tenant side, we made sure to properly communicate the advantages of this “uncommon” form of renting as well as the new digital rental process itself, which is often completely new to our clients.  

4. For Spotahome the relationship with our landlords is very important. What do you do to strengthen your relationship with German landlords?

Communication and Innovation would be my keywords here : We are of course in constant contact with our private and professional landlords. After ensuring a smooth onboarding process we have to make sure to listen, identify and anticipate their needs.

As a result of this constant exchange, Spotahome is continuously innovating and creating new products and services that are aimed to meet our landlords' needs :

After introducing a 100% secure online rental process to the market,  Spotahome is now also offering a series of premium products that provide additional protection to landlords in case of damages, arrears and earlier departure of the tenant.  In addition to that, Spotahome even guarantees and manages the monthly rent payments.  Of course there are more innovations to come and it is super exciting for me to be a part of this process.

5. In Germany you are already operating in 8 German Cities. Do you have new cities you plan to open soon?

Spotahome has bookable supply in Berlin, Frankfurt, Hamburg, Munich, Stuttgart, Düsseldorf, Cologne and Leipzig and we believe that there is still a huge potential in those cities for us. So at least for 2022, we are focusing on those. However we will most definitely expand into more German cities after that.