Hiring people from overseas costs companies plenty of time and money — and it‘s a sound investment, if the new hires stay at least a few years. One of the main factors influencing expat happiness is finding a long-term flat: It‘s important to settle in and get organized quickly so that they can focus on the ‘real‘ work. But over the past few years the housing market in Germany in general, and in Berlin in particular has made things difficult. And it‘s having a negative effect on Germany‘s reputation as a popular expat destination. According to the 2022 InterNations annual Expat Insider survey, Germany placed last of 52 countries rated by nearly 12,000 expats.
What's Going on in Berlin?
This downward turn is a fairly recent development. Berlin‘s lifestyle and cheap rent used to be the main points attracting talent from across the globe, and now Berlin is Germany‘s multicultural tech hub. But in the past few years rental prices in Berlin have soared, and as a result companies are finding it more difficult to attract people to the city. The most dramatic rise in housing costs took place recently, over just a few months. According to statistics compiled by the immowelt Group, between November 2022 and February 2023 the average net rent per m² in Berlin rose from €9.86 to €12.55 — a whopping 27% increase. Berlin‘s housing is now the second most expensive in Germany, just behind Munich; a situation that would have been unthinkable five years ago.
The situation is compounded by the shortage of available housing. Various factors have contributed to the gap between supply and demand, and it can take a long time to find a long-term flat. Two years ago people stayed in temporary, furnished accommodation on average for three months. According to a Bloomberg article, this has doubled, and six months of paying expensive short-term flat rent takes its toll.
Are Expats Still Coming to Germany?
But there is a silver lining. Germany ranks 15th overall in the Expat Insider survey‘s ‘Quality of Life’ category, so it’s no surprise that international talent still looks to Germany for new prospects, despite the hurdles they’ll have to navigate once they arrive.
The expenses new hires are faced with when staying in temporary accommodation for so long are certainly daunting. But the real cost can be measured in their stress levels, and as a result, in both productivity and quality of life. Ideally, new arrivals should be able to settle in easily, enjoy their new city, and stay in their new job for the long term. Less turnover inevitably saves companies time and money; it also contributes to a much more positive and efficient work environment.
Relocation Experts Can Make the Transition Easier
While Expath can‘t find the flats for employees, we can take the bulk of the load off the shoulders and relieve the HR team from having to deal with this additional work. From the initial research, through to preparing application packages, attending flat viewings, and translating rental contracts, Expath coaches guide new hires through every step of the process. That means peace of mind — for them and for the company.
Expath has over 10 years of experience relocating international talent — especially to Berlin. Our clients also benefit from discounts when signing up with one of our temporary accommodation partners.
Book a consultation now and let us help your new hires hit the ground running.