Germany’s Housing Shortage Reaches its Highest Level in 20 Years
The housing shortage in Germany has reached its highest level in 20 years, with around 700,000 new residences needed to alleviate the pressure on the real estate market. The shortage is due to a combination of factors, including rising construction costs, high interest rates, and an influx of refugees. Experts warn that construction investments are less attractive in many areas, and the sharp increases in construction prices and interest rates in recent months have negatively affected many construction projects, exacerbating the housing shortage. The arrival of Ukrainians to Germany, following the start of the Moscow-Kyiv war on Feb. 24, 2022, has caused an additional demand for 200,000 housing units, further straining the already tight housing market. In Berlin, the state government held a referendum to expropriate thousands of houses from real estate companies due to protests against rent increases. More than half of the voters (56.4 percent) supported the expropriation of over 240,000 apartments, as the companies own more than 550,000 residences worth €100 billion in Germany, where half of the population lives on rent. The average rents in the capital Berlin have increased by more than 100 percent since 2010, with new apartments being rented for at least €26 per square-meter. The rising rental prices have made it difficult for many families to find affordable housing, with some resorting to living in cramped conditions or in areas with limited access to essential services. The German government is working to address the housing shortage by implementing policies to increase the supply of affordable housing and limit rent increases. However, it is clear that more needs to be done to address the root causes of the problem, such as rising construction costs and interest rates. Unless significant action is taken, the housing shortage in Germany is likely to persist, causing continued economic and social problems for families and communities.
Tags : housing shortage Germany residences real estate market