Rent Has Increased Around the Globe — What To Expect in 2025
Written by
J. Arky
Edited by
Cory Dudak
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If you are a renter, you have probably felt the strain of paying for your place every month. The good news is that you are not alone: all around the world, people are paying a lot of money to live in a place they do not even own. According the the latest data, rents have gone up globally in 2024, and that trend might continue into next year.
For those in the United States, renters are spending almost 18% more on rent since January 2023, according to the real-time PocketSmith’s Global Spending Map. GOBankingRates asked a few experts why rent keeps going up around the world, and what to expect for 2025.
Inflation and Rising Interest Rates
Landlords who own rental properties in countries around the globe have noted that inflation and rising interest rates are significant factors that cause them to increase in rental prices, though much more significantly in 2024.
David Schulz, the principal broker at Schulz Realty, explained “The cost of living, including materials and labor, is rising globally. When expenses for utilities, property maintenance and labor increase, landlords pass these costs onto tenants in the form of higher rent.”
Schulz pointed out that if inflation remains stable, rental prices will likely continue reflecting these financial pressures.
Post Pandemic Demand Went up
Rents in almost every major American metro area hit record highs in 2024, with a similar trend happening in the U.K., where average rents reached new highs in every major town and city, according to SpareRoom director Matt Hutchinson.
“The main driver behind this was the huge spike in demand post pandemic,” shared Hutchinson. “As things began to ease, we saw huge numbers of people who moved back in with family during Covid re-enter the market. That was especially true in the roommate market, where younger renters moved back in with parents.”
Shifting Investment Trends in Real Estate
“In recent years, both individuals and companies have been paying a premium for properties designed for rental income,” stated Schultz. “Many of these investors expect higher returns, which results in increased rent prices.”
Additionally, Schutz highlighted that property owners who capitalize on the increased equity in their valuable properties often sell, and new owners tend to raise rents to cover their higher costs.
Hutchinson noticed how this “[all] coincided with increases in mortgage rates, which had an impact on the number of properties available, meaning the rental markets became incredibly competitive, driving rents up.”
What’s in Store for Renting in 2025?
The good news, in Hutchinson’s professional opinion, is that as the ratio of people looking versus rooms available falls, markets should see the pressure on rents calm. “That said, in our experience, rents never fall as quickly as they rise,” added Hutchinson.
Schultz and his associates predicted a trend suggesting that rental rates will likely continue increasing through 2025. “However, the pace of this increase may slow down if inflation and interest rates stabilize,” cautioned Schultz. “On the other hand, if inflation remains high and supply shortages continue, rental rates could keep rising.”
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