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How new homes in Germany are not being built where they are most needed

The demand for new homes is not being met in German cities – but there are too many new builds in rural areas.

How new homes in Germany are not being built where they are most needed
Scaffolding on a new building in Cologne, North Rhine-Westphalia. Photo: DPA

That’s according to a new study by the Institute of the German Economy (IW) which says too few apartments are being built where they are needed, such as metropolitan areas and university towns.

The IW found that in Cologne, less than half – 46 percent – of the demand for new apartments has been met since 2016.

Although the government has pledged to tackle Germany's affordable housing shortage with a series of measures, including the construction of new social housing units, the outlook is still currently bleak.

Overall in 2019, 342,000 new homes will be needed throughout Germany to meet demand. 

Only 287,000 apartments were completed in 2018. This figure is unlikely to pick up significantly this year, so the discrepancy between supply and demand remains large.

READ ALSO: Germany to invest in new homes as rent in cities soars by six percent

Why are too few homes being built?

Researchers calculated the figures by comparing the number of apartments completed in the past three years with the demand they estimated on the basis of factors such as population development and vacancies.

In other major cities the outlook is also poor. In Stuttgart for example just 56 percent of the apartments needed have been built since 2016.

The situation is only slightly better in Munich, where the figure is 67 percent. In Berlin 73 percent of the demand has been met and in Frankfurt am Main that figure is 78 percent. 

Authors Ralph Henger and Michael Voigtländer said the lack of new homes was fuelling the affordable housing crisis. 

“Not only are there currently no apartments here, but there is also a need for a further increase in construction activity in the longer term,” they wrote in the study

It’s a similar picture in university towns like Münster, where too few apartments are being built.

Researchers said there are various reasons for the lack of new homes, including the high influx of people coming into cities to live, a lack of skilled workers in the construction industry and strict building regulations.

READ ALSO: Why Berlin is buying back nearly 700 apartments on its historic Karl-Marx-Allee

New homes being constructed in Hamburg. Photo: DPA

The authors warn that cities will have to make a proactive effort in order to slow down the increase of rents as demand for apartments increases.

They argue that, among other measures, the government and the state should provide more funding to cities for improving local transport connections. That way, suburbs would be better connected and it could relieve the pressure on the housing market in inner cities.

Different story in less built-up areas

However, the situation in rural areas is quite different: according to research there are too many new buildings being built in some places, such as Saxony-Anhalt, Saxony, Saarland and the outskirts of Bavaria. 

The researchers found that – relatively – “many” new homes were being built which is positive, however in some places it would make more sense to convert old buildings instead of constructing new buildings.

Meanwhile, new developments on the doorsteps of small towns and cities are making village centres less desirable, and the vacancy problem is worsening.

READ ALSO: How Germany plans to fight its stark regional inequalities

“Municipalities in rural areas far away from metropolises should better manage the space in order to remain attractive and avoid vacancies in the centre of the town,” the study said. 

The principle of “conversion before new construction” is important here, the researchers said. In one third of German districts, “construction activity in new buildings should be slowed down in order to avoid oversupply”.

In future, the problem of housing shortages could ease. According to estimates by study authors, demand for homes will fall to around 260,000 apartments per year by 2025 and to around 246,000 apartments per year by 2030. 

The main reason for this is the expected decline in immigration, which is unlikely to remain permanently at a level of more than 400,000 people per year.

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REVEALED: The most commonly asked questions about Germans and Germany

Ever wondered what the world is asking about Germany and the Germans? We looked at Google’s most searched results to find out – and help clear some of these queries up.

Hasan Salihamidzic, the sports director of FC Bayern, arrives with his wife at Oktoberfest in full traditional dress. Photo: picture alliance/dpa |

According to popular searches, Germany is the go-to place for good coffee and bread (although only if you like the hard kind) and the place to avoid if what you’re looking for is good food, good internet connection and low taxes. Of course, this is subjective; some people will travel long stretches to get a fresh, hot pretzel or a juicy Bratwurst, while others will take a hard pass.

When it comes to the question on the bad Internet – there is some truth to this. German is known for being behind other rich nations when it comes to connectivity. And from personal experience, the internet connection can seem a little medieval. The incoming German coalition government has, however, vowed to improve internet connectivity as part of their plans to modernise the country.

There are also frequent questions on learning the German language, and people pointing out that it is hard and complicated. This is probably due to the long compound words and its extensive grammar rules, however, as both English and German are Germanic languages with similar words in common, it’s not impossible to learn as an English-speaker.

Here’s a look at some of those questions…

Why is German called Deutsch? Whereas ‘German’ comes from the Latin, ‘Deutsch’ instead derives itself from the Indo-European root “þeudō”, meaning “people”. This slowly became “Deutsch” as we know it today. It can be a bit confusing to English-speakers, who are right to think it sounds a little more like “Dutch”, however the two languages do have the same roots which may explain it.

And why is Germany so boring? Again, probably a generalisation, especially given that Germany has a landmass of over 350,000 km² with areas ranging from high rise, industrial cities to traditional old town villages and even mountain ranges, so you’re sure to find a place that doesn’t bore you to tears.

Perhaps it is a question that comes from the stereotype that Germans are obsessed with strict about rules, organised and analytical. Or that they have no sense of humour – all of these things being not the most exciting traits. 

Either way, from my experience I can confirm that, even though there is truth to German society enjoying order and rules, the vast majority of people are not boring, and I’m sure if you come to Germany you’ll meet many interesting, funny and exciting people. 

READ ALSO: 12 mistakes foreigners make when moving to Germany

When it comes to the German weather, most people assume a cold and cloudy climate, however this isn’t entirely true. While the autumn and winter, especially in the north, comes with grey skies and sub-zero temperatures, Germany can have some beautiful summers, with temperatures frequently rising above 30C in some places.

Unsurprisingly, the power and wealth of the German nation is mentioned – Germany is the largest economy in Europe after all, with a GDP of 3.8 trillion dollars. This could be due to strong industry sectors in the country, including vehicle constructions (I was a little surprised to find no questions posed on German cars), chemical and electrical industry and engineering. There are also many strong economic cities in Germany, most notably Munich, Frankfurt am Main and Hamburg.

READ ALSO: Eight unique words and phrases that tell us something about Germany

Smart and tall?

Why are Germans so tall? They are indeed taller than many other nations, with the average German measuring a good 172.87cm (or 5 feet 8.06 inches), however this may be a question better posed to the Dutch, who make up the tallest people in the world.

Why are Germans so smart? While this is again a generalisation – as individuals have different levels of intelligence in all countries – this question may stem from Germany’s free higher education system or their seemingly efficient work ethic. Plus there does seem to be some scientific research behind this question, with a study done in 2006 finding that Germans had the highest IQ in Europe.

So, while many of the questions posed about Germany and Germans on Google stem from stereotypes, we can confirm that some aren’t entirely made up. If you’re looking to debunk some frequently asked questions about France and the French, check out this article by our sister site HERE.