In Germany lacks living space. This mantra can be heard all over the country – sometimes as an annoyance, sometimes as a warning, combined with the fear of social division. A study by the Hanover Pestel Institute now estimates the gap between supply and demand nationwide to be around 800,000 missing apartments. The federal government itself has set itself the construction target of 400,000 new apartments per year. However, various industry forecasts suggest significantly fewer than 300,000 new apartments this year.
However, the housing markets and property prices differ significantly within Germany. There is probably little point in building hundreds of thousands of apartments in Saarland, Saxony, Saxony-Anhalt, Thuringia or Mecklenburg-Western Pomerania. The Pestel study also classifies these regions predominantly as areas with a surplus of housing, which can be seen not only, but especially in the countryside. In Saxony-Anhalt, housing companies in rural areas have an average vacancy rate of around 15 percent, as an analysis commissioned by the local housing industry has shown.
The desire for living space is individual and unevenly distributed across the country. The help for the new building therefore affects less the federal government and more the respective state government and, above all, the popular cities in which more people than before work, live and want to live. Ultimately, politicians would have to work locally for more living space: designate building areas, enable densification and additions, and reduce requirements for new houses.
This means fewer apartments are being built
It is also important to talk to local residents and promote new buildings there. In Berlin, residents are protesting against the construction of 99 apartments in backyards in Pankow. Originally, around 180 apartments were supposed to be built here, but the state-owned housing association is now refraining from doing so. In other cities, residents are also resisting new buildings because they see green spaces threatened or fear noise.
For many people, they would prefer to keep everything in their neighborhood as it is. Long-time residents with their own apartment or long-term rental agreements are pitted against newcomers who are still looking for their own four walls or against families with small children who need more space. Anyone who is currently looking for a rental apartment in the big cities is losing out and will probably have to pay more than before.
This is one of the reasons why the search for accommodation has long since shifted from the centers of large cities to the suburbs in the wider area. Depending on your professional activity, working from home can help, meaning that commuting to the office is necessary on fewer days and is less significant. Something can also be done here to combat the housing shortage: by expanding local transport, rural areas can be revitalized as a residential region that may have previously complained about empty houses. As a rule, properties in the countryside are more attractive if they have good connections to cities. Instead of a lengthy rail connection, a fast bus service could initially step into the breach. It should be in the best interest of every community not to be left behind.
Has the valley bottomed out?
Whether living space away from the big cities helps or not: demand for real estate remains high in metropolitan regions. At the same time, construction companies are complaining about missing orders and canceled projects. Higher building interest rates and construction costs make it more difficult for private individuals and companies to finance both new buildings and the purchase of existing buildings. As a result, the purchase prices for houses and apartments have already fallen significantly on average over the past year. At the same time, we hear again and again from the industry that owners who would like to sell are afraid of the current market prices and hope for higher income. There is disagreement as to whether the market has already bottomed out or whether purchase prices will continue to fall. Some market participants do not expect any improvement this year.
However, for tenants, who make up half of the population in Germany, the situation in the cities is unlikely to improve. Anyone looking for an apartment there will still have a lot of competition. Those who can move away have one more option. Anyone who already lives in a house or apartment in the location of their choice can count themselves lucky.
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