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Forecasts suggest significant rental cost increase in Europe

International students in Europe are faced with an average annual 14.5% price increase across all rental property types, research has shown.

The average cost of a one bedroom apartment in Paris is €1978 per month. Photo: Unsplash

“Since most travel restrictions have been lifted, demand for rental properties has been rising fast, resulting in an overstrained rental market"

The HousingAnywhere International Rent Index by City report published its results from the first quarter of the 2022 which looks at one bedroom apartments, studios and private rooms across 22 European cities.

The report found Paris to be the most expensive city in Europe for both a private room and a one bedroom apartment with the latter costing, on average, a staggering €1,978 per month in rent, closely followed by London at €1,940.

While the rental housing shortage persists, demand from renters continues to rise, driven by the ending of the Covid-19 pandemic restrictions and the return of international student mobility.

“Since most travel restrictions have been lifted, demand for rental properties has been rising fast, resulting in an overstrained rental market,” said Djordy Seelmann, CEO of HousingAnywhere.

For many international students, the space which a private one bedroom apartment offers is a luxury that they cannot afford. Instead, many choose studio apartments or house shares as more affordable options.

Hannah Jones, originally from Edinburgh in Scotland, is studying a masters degree in Education Sciences in Paris and told The PIE that she feels that she has an exceptionally good deal, paying €550 per month for a private room in a shared apartment.

According to the report, Jones’ rent is significantly below average with the average monthly cost for a private room in Paris being €789.

Unfortunately for students like Jones, the report indicates the year-on-year increase for all property types across all cities, which exceeds pre-pandemic prices, includes a 12% increase for private rooms and 16.2% for studios.

“I think the rent prices are extremely high in Paris compared to other cities in France and although the prices may be only just affordable, the apartments are usually very small and in bad condition,” added Jones.

“The rental market is extremely competitive and it’s very hard to find an apartment. As a foreigner and a student who doesn’t earn three times the rent, most landlords are not at all interested in letting to you.”

“The rental market is extremely competitive and it’s very hard to find an apartment”

Jones is eligible for Caisse des Allocations Familiales (known as CAF), the French government’s housing allowance which covers students. However, since applying for support six months ago, she has not received any money.

Elsewhere, Amsterdam has shown almost double the average quarterly increase for each type of accommodation with a 10.8% increase for apartments, 9.2% for studios and 7.7% for private rooms.

Juan Rayón, president of Erasmus Student Network, told The PIE that accommodation has long been a problem, pointing to research suggesting that 45% of students in Erasmus+ study mobility find it difficult to secure accommodation. A similar proportion found accommodation costs higher than expected.

“Housing has been a problem for quite a number of years, especially in certain mobility destinations, like capitals, big cities, etc. It’s one of the main challenges,” he said. And as forms of mobility become more flexible, the difficulties increase, he continued.

“In the last few years, we are seeing an increase in, for instance, trainingships. Now there’s more talk on the importance of short-term mobility, especially for inclusion purposes. So basically, this adds up to the existing challenges.”

To support students on non-traditional mobility formats and short-term programs, Rayón proposed “concrete” support initiatives.

“We live in this inflationary era and it’s really important to make sure that we adapt mobility grants to this change in prices.

“We have been [talking about] this dimension of inclusive mobility and how important increasing mobility is, but if we are not fast at adapting grants, what’s going to happen is that students are not going to be able to properly afford [mobility].

“At the moment, everybody who goes to the same country gets the same grant, but that doesn’t really work, especially for accommodation.

“If you go on Erasmus to Madrid, it’s completely different compared to if you go to Alicante or to a medium-sized Spanish city. So we need to adapt grants, depending on the cities. It can also be done through some kind of accommodation top up,” he suggested.

Dialogue and collaboration between universities, local authorities and housing providers also needs to be expanded, he added.

According to HousingAnywhere, “the stress level is expected to intensify even further as the rental market enters its traditional peak season in the next quarters”.

Seelmann added that “as cities struggle to develop and implement long-term strategies that combat the imbalance of supply and demand, the lack of available, affordable and accessible rentals is likely to continue”.

Throughout the report, the only yearly price decrease found was for private rooms in Helsinki and Brussels which saw decreases of 5.9% and 1.1%, respectively.

Market intelligence and advisory firm BONARD noted that purpose-built student accommodation however “remains affordable”.

Overall, rents have been increasing steadily since 2019, Bonard said. The rent in private PBSA residences across Europe increased in 2021 by 1.1% for a studio and 1.5% for a single room, compared to 2020. There were notable variations on a city-to-city basis, the company added. While The Hague showed a 0.4% increase for a studio in private PBSA, monthly rent for the same room type in Aarhus and Lublin increased by 14% and 5%, respectively. 

“Comparing private PBSA to the private rental market, in most countries PBSA is more affordable,” Julia Momotiuk, head of Rented Residential at BONARD explained.

Notable examples of this trend are London and Paris, where the PBSA average monthly rent is 15% lower than in the private rental market. Rotterdam and Venice offer an even bigger gain to those choosing private PBSA, with rents 23% and 27% lower.

However, cost is not the only issue students face, Rayón emphasised.

“Every year we get a number of emails from students saying they arrived to their destination and the flat was a scam,” he said. “Around 10% of students have problems with accommodation, which is quite a lot if you think about.”

“It can be really traumatic for the students, if they have problems with accommodation”

He relayed a situation where a student from Hungary arrived in Barcelona to find the accommodation he had booked didn’t exist.

“[He said] ‘since I didn’t receive my grant yet, I literally have no money’… ESN was there to support the student. He stayed with some of our volunteers in Barcelona and we very fast got in touch with his university.

“The problem is that it can be really traumatic for the students, if they have problems with accommodation… scamming, the quality, etc. that can really hamper the normal development of the mobility experience. This is why it’s so important. It is not significant in terms of the number affecting all the students, but when it affects, it’s really damages the mobility experience.”

HousingAnywhere analysed 133,736 properties listed on the platform between March 2021 and March 2022.

 

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