Quarterly rental prices have dropped in Q2 for nearly all European cities. While early signs of the impact of the Covid-19 pandemic on rental prices were already noticeable in the first quarter of 2020, the effects of the travel ban, which was valid from mid-March, are now fully visible. Rents for single rooms have dropped the most by year-on-year comparison, while prices for apartments and studios are less impacted. This is a result of strengthening local markets: even though demand for these properties has decreased significantly among expats and young international professionals, it remains high among the local inhabitants of larger European cities. More single rooms are left vacant as there is less demand for these properties from international markets. Cities that were less impacted by Covid-19, in countries that were able to reopen their borders in mid-June, are showing smaller drops in rental prices as a result.
Italian cities are showing the biggest drops in rental prices of all cities featured in the Rent Index. Milan, the capital of Lombardy and the region where the virus struck the country the hardest, saw the biggest decreases in rent of all the cities in the Rent Index. Compared to the previous quarter, one-bedroom apartments dropped by -7,8% to EUR1,096 per month, a drop of -4,6% compared to Q2 2019. Turin, located 140 km from Milan, is showing a quarterly decrease of -7,8% for one-bedroom apartments to EUR 812 per month, a decrease of -5,9% compared to last year. In Florence, rental prices for one-bedroom apartments dropped by -6,9% to EUR 918, a drop of -4,6% compared to last year. Helsinki shows a small impact on rental prices compared to the previous quarter: -0.1% for single rooms, -0.07% for studios, and -0.02% for one-bedroom apartments. In Reykjavik, we see a similar trend: -0,06% for single rooms, -0,07% for studios, and -0,02% for one-bedroom apartments, compared to Q1. Both cities have positive year over year rental price increases for apartments. Compared to 2019, rental prices for one-bedroom apartments in Helsinki increased by 1,4% to EUR 1,399. In Reykjavik, the price for one-bedroom apartments increased by 3,6% compared to last year to an average of EUR 1,081 per month. Helsinki had a peak in the number of Covid-19 cases in mid-April. Starting June 15, Finland has reopened its borders for the Baltic countries and the other Nordic countries, except Sweden. Reykjavik’s peak also came mid-April and they reopened their borders on June 15.
Compared to last quarter, rental prices for single rooms in Valencia dropped by -4.9% to an average of EUR 319 per month. Rental prices for studios decreased by -1.4% to EUR 592, and the rental price of a one-bedroom apartment decreased by -2.4% to EUR 878.