Rental yields on residential real estate in Germany are low to moderate, partly because of recent strong price increases, but more importantly because housing investments (including for rentals) used to be heavily subsidized by tax breaks. According to Eurostat, many Germans live in rental housing, and only 51% of all German families own their homes.
According to the Global Property Guide study, rental yields range from 3.5% to 3.7% in Germany’s major cities:
In Munich, a 120-square-meter apartment can be rented for about 2,250 euros per month with a 3.5% yield.
In Berlin, an apartment of 120 square meters can be rented for about 1,500 euros per month with a yield of 3.5%.
In Frankfurt, a 120 square meter apartment can be rented for about 1,700 euros per month with a yield of 3.7%.
Although rents continue to rise, they have barely kept up with price increases. Rents on existing contracts rose 121.6 percent from 1990 to 2020, and rents on new contracts rose 85.9 percent. On the other hand, according to BulwienGesa, the average apartment price has risen 145.5% and townhomes have risen 129%.