Munich's Rental Crown: €23.70/m² and No Downward Trend

Munich has once again claimed the title of Germany's most expensive rental market. In the second quarter of 2026, the average cold rent in the Bavarian capital reached €23.70 per square metre, according to a new analysis by the Kiel Institute for the World Economy (IfW). That figure leaves every other major German city far behind and represents a premium that renters elsewhere can only imagine.

The gap is stark. Leipzig, the most affordable of Germany's eight largest cities, recorded just €10.50 per square metre—less than half the Munich level. Stuttgart, while still among the country's priciest markets, saw rents stagnate compared to the previous quarter, illustrating that a high price tag does not necessarily mean continued upward momentum. The IfW researchers note that level and dynamism are increasingly separate forces.

The story extends well beyond the top eight cities. A wider look shows that mid-sized locations are now catching up rapidly. Kiel, Karlsruhe, Wiesbaden, Münster, Lübeck, Essen, Wuppertal and Potsdam all posted quarterly increases of 1.3% to 2.0%, while declines were rare and concentrated in only a handful of places such as Braunschweig and Erfurt.

Decoupling Price Levels from Growth: What the IfW Data Really Shows

Munich's Price Plateau vs. Leipzig's Catch-Up Dynamics

The IfW’s core message is that a high rent level does not automatically signal strong future growth. Munich, despite its towering €23.70/m², is not necessarily accelerating; rather, its price pressure is baked in by a chronic undersupply of housing and relentless demand. Stuttgart’s near-flat quarterly movement underscores this decoupling even more vividly—the city remains expensive, but the rapid growth phase appears to have paused.

Conversely, Leipzig’s €10.50 hides a different risk. A low level can often be the starting point for above-average increases as demand spills over from saturated high-cost cities. For tenants already in Leipzig, the affordability is real, but the trend line suggests the window for locking in ultra-cheap rents may be narrowing.

The New Build Premium: Why 19 Euro Metres Cost 36% More

Across Germany, newly built rental apartments command an average of €19.00 per square metre, while existing stock stands at just €13.90—a gap of roughly 36.6%. In Munich, the split is even more pronounced, with new-build rents hitting €27.10/m². This premium reflects not only higher construction standards but also the fact that recent completions are often in the most sought-after locations. For renters, the numbers make a clear point: choosing an older building can slash the monthly bill dramatically, even in the same city.

The Quiet Surge in Mid-Sized Cities

The quarterly gains in places like Kiel (+2.0%), Karlsruhe (+1.8%) and Münster (+1.6%) reveal that housing pressure is no longer a metropolitan-only phenomenon. Remote work, improved rail links and a push for more living space are pushing demand into previously overlooked cities. This trend chips away at the traditional east-west and north-south rent divides and means that households fleeing high costs in Munich or Stuttgart may soon find fewer true bargains elsewhere.

Navigating Germany's Two-Speed Rental Market as a Tenant

  • If you are in Munich: at €23.70/m², expect little relief. Budget tightly and consider whether a move to the outskirts or to a non-new-build property can reduce the burden.
  • Stuttgart renters: the stagnation offers a window to renegotiate or at least avoid sharp hikes in the short term, but the underlying price floor remains high.
  • For those eyeing Leipzig: €10.50 is a genuine bargain, but the city’s growth dynamics mean early movers could lock in today’s lower rates before catch-up inflation sets in.
  • New-build vs. existing: a 36.6% premium across Germany—and over €27 in Munich—means choosing an older apartment can save hundreds of euros a month. Weigh the modern amenities against the financial hit.
  • Mid-sized cities like Kiel, Karlsruhe and Münster: rents are rising fast. If relocation is on your radar, acting sooner rather than later could translate into a meaningful long-term saving.