It’s Not Rent Driving Pressure in the Real Estate Market – It’s Operating Costs

The public debate around rising costs in the real estate market continues to focus heavily on rent levels. However, this perspective falls short. To truly understand cost pressure across the market, a broader view is required. The strongest dynamics are not coming from net rents, but from operating costs. A closer look at the housing market—as illustrated by long-term data—makes this clear: the so-called “second rent” has become the real cost driver.

The Blind Spot in the Real Estate Debate

Across the real estate market, rising cost burdens are often equated with rising rents. In reality, these trends are not aligned. While rents in many segments show relatively stable and moderate growth, the housing market data tells a different story when it comes to operating costs.

The chart highlights this divergence clearly. Over decades, operating costs have increased significantly faster than net cold rents in the housing market. In recent years, this gap has widened dramatically. For occupiers, however, the distinction between cost components is irrelevant—what matters is the total monthly burden. This leads to a distorted perception, where rent is often blamed for cost increases that are in fact driven elsewhere.

Why Operating Costs Are Structurally More Impactful

The explanation lies in the system logic of the real estate market. Rents are regulated, negotiated and politically sensitive. Operating costs, by contrast, are driven by external factors such as energy prices, regulation and infrastructure. They are largely non-negotiable and, in many cases, directly passed through.

This creates a structural imbalance. Rent adjustments tend to be gradual, while increases in energy and operating costs impact users immediately. As a result, the key performance drivers in real estate are shifting. It is no longer sufficient to focus on rental income alone—operational cost structures are becoming equally critical.

This shift also redefines what makes a high-quality asset. Energy efficiency, building technology and the ability to manage operating costs effectively are becoming central value drivers. Assets that fail to address these factors risk losing competitiveness, regardless of location or rent level.

What This Means for the Real Estate Market

For the real estate market as a whole, this development signals a fundamental shift in value creation. While rental income is increasingly regulated and constrained, cost control and energy performance are gaining strategic importance.

The key question is no longer just how rents will evolve. The more relevant question is how total cost structures can be managed sustainably. Long-term asset performance will depend on the ability to control operating costs and improve efficiency.

The real estate market is moving beyond a purely rent-driven logic toward a systems-based understanding. In the future, asset quality will not be defined by rent levels alone, but by the ability to manage total occupancy costs. This is where competitiveness, resilience and affordability will ultimately be determined.