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What a boom in remote working could mean for Germany’s housing market

Economists think that the rise of remote working could make moving outside cities more attractive for many. Here's a look at who - and where - is most affected by the trend.

What a boom in remote working could mean for Germany's housing market
Working from home may become the new normal. Photo: obs/3T Supplies AG/

The work-from-home boom could relieve the pressure on the housing market in big cities whilst bolstering interest in the surrounding areas, according to property experts.

“Remote working could make a larger area around the city more attractive,” said Michael Voigtländer, property expert at the German Economic Institute (Institut der deutschen Wirtschaft). Those who only need to go into the office twice a week would be able to deal with a longer commute. 

READ ALSO: Will working from home become the norm in Germany post coronavirus?

The rise of remote working could also spell good news for rural areas. Those who choose to move, however, would require a good infrastructure consisting of schools, Kitas, fast internet and a decent cultural scene.

“The housing market has always been very focussed on the big cities,” said Vogtländer. That said, he doesn’t expect a mad rush to the countryside. Urban areas will remain attractive for highly qualified people seeking jobs in the service industry.

“The commuting areas in large metropolises could expand, however.” This could slow down accelerating house prices in many big cities. 

READ ALSO: Housing in Germany: Here's where demand and prices are soaring

Beyond the coronavirus crisis

Working from home and video conferencing may well continue to influence the working world after the pandemic is over. 

Seventy-three percent of companies that have turned to home working during the pandemic plan to offer the option more widely in the future, according to a survey of around 800 staff executives conducted by the Ifo Institute in Munich, who spoke of the shift as a breakthrough. 

READ ALSO: Home office makes employees more effective and happy, German study finds

A prolonged increase in the number of people working from home could lead to a shift in demand for housing, recent analysis by the property company JLL has revealed. 

Higher living costs in the city and the comparatively lower prices in the surrounding areas could make the latter option more attractive for many.

A woman working from home in Berlin. Photo: DPA

“The increased commuting costs would ultimately be balanced out”, wrote JLL-Expert Helge Scheunemann. 

The coronavirus crisis has also led to a shift in people’s idea of their ideal home, with many now seeking studies, gardens, balconies and more space in general. 

According to JLL, the cities particularly affected by this shift in demand will depend not only on price differences and transport connections, but also on the type of sector that people work in: office jobs can easily be done remotely, whilst manufacturing jobs require being on-site. 

Which cities will be the most affected?

Cities like Munich, Cologne, Düsseldorf, Frankfurt and Darmstadt, where many work in office and service jobs, are ripe for a shift in housing demand. Major regional cities such as Münster, Jena and Dresden may also be suited to the change. 

The coronavirus crisis forced companies to switch to large-scale remote working almost overnight – a departure from the norm in Germany, where office working usually plays an important role. 

In 2018, office workers spent only around 11 percent of their hours working from home, according to calculations from the German Economic Institute. 

But now, said Voigtländer, both employers and employees have realised that it can work well. Remote working can also help cut costs, which “is naturally attractive for companies.”

Many have discovered the advantages of working from home. Photo: DPA

Large companies have already recognised its potential. Siemens now allows at least 140,000 of its employees worldwide to work remotely for two to three days a week. 

At their annual general meeting, Deutsche Bank boss Christian Sewing asked whether the company should give employees more flexibility to work from home if they wanted to, and whether so much expensive office space in city centres is still necessary. 

According to recent calculations from the DZ bank, having fixed workstations in offices is expensive. In 2019, a square metre of office space in the seven largest cities in Germany cost between €18 and €25 every month, including additional expenses.

READ ALSO: How the coronavirus crisis could change German city centres?

The 30 square meters needed on average for each employee would cost €6,500 to €9,000 each year. For prime locations such as Berlin, Frankfurt or Munich, the cost can reach more than €15,000.

This is compounded by the fact that offices often lie empty – over the weekends, but also due to holidays, illness, business trips, remote working and part-time contracts. Office desks are used for only 190 days a year on average, according to DZ bank.

If companies want to save money, then it is worth considering hot desking. For employees, that would mean packing up their work materials and personal items such as family photos at the end of the day to leave the desk free for other colleagues. 

The future of offices

Does this mean that offices have become an outdated model? If remote working remains popular, people will need space for a study, Voigtländer points out. “That takes away from the advantages of lower property prices in the country.”

READ ALSO: Nearly half of firms to allow working from home after coronavirus crisis

Remote working is also not without its drawbacks. “Face-to-face interaction in the office creates a sense of community spirit and allows employees to identify with the company they work for,” he said.

Additionally, not everyone is able to work well from home, and new employees will still need to receive induction training on-site. 

Companies would have to cover for the costs of working remotely – tax deductions are so far only possible in some cases, for example if a person has a separate room in their designated as an office.

However, Germany is currently considering additional tax advantages for those who work from home. 

“We will probably not all work from home forever,” said Voigtländer. “But we may see the emergence of a new work-life balance.”

Translated by Eve Bennett.

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Pandemic in Germany unlikely to end this year, says top virologist

High profile German virologist Christian Drosten believes Germany will see a severe spike in Covid infections after summer, and that the pandemic will not become endemic this year.

Pandemic in Germany unlikely to end this year, says top virologist

Drosten previously said that Germany would probably be able to declare the end of the pandemic this year.

But in an interview with Spiegel, Drosten said he had reevaluated his opinion. 

“When the Alpha variant came, it was very surprising for me. When Delta appeared I was sceptical at first, then with Omicron we had to reorient ourselves again. And since January there have already been new Omicron subtypes.

“So I would actually like to correct myself: I no longer believe that by the end of the year we will have the impression that the pandemic is over.”

READ ALSO: End is in sight for pandemic in Germany, says virologist 

Drosten also said that Germany will not see a largely Covid-free summer, which has been the case in previous years, and a further increase in infections in autumn. 

“We are actually already seeing an exponential increase in case numbers again,” Drosten said.

“The BA.5 variant (of Omicron) is simply very transmissible, and people are losing their transmission protection from the last vaccination at the same time.”

In other countries, he said, when the number of cases become high, hospitalisation and death rates also rise again. “Unfortunately, that will also be the case here,” said Drosten, but added: “Overall, however, far fewer people will become seriously ill and die than in 2021.”

Drosten said he expected many more infections from September.

“I hope that the school holidays will dampen the increase in cases somewhat. But from September, I fear we will have very high case numbers,” the head of the virology department at Berlin’s Charité hospital told Spiegel.

READ ALSO: German Health Minister lays out autumn Covid plan

Virologist Christian Drosten at a Covid press conference in 2021.

Virologist Christian Drosten at a Covid press conference in 2021. Photo: picture alliance/dpa | Kay Nietfeld

If the government does not take any action, he predicted there would be a lot of sick leave across all industries. “That will become a real problem,” he said.

Drosten said he did not expect overcrowded intensive care units in Germany.

But the new BA.5 sub-variant, which is becoming dominant in Germany, may affect people more strongly. 

“The wheel is turning more towards disease again,” said Drosten. It is not true that a virus automatically becomes more and more harmless in the course of evolution. “That makes me even more worried about the autumn,” he said.

Drosten recommends wearing masks indoors during the colder months, saying it is “the least painful” measure.

If, in addition, “up to 40 million people could be immunised or given a booster vaccination” before winter, for example by urgently calling for company vaccinations, that would “really make a difference”, Drosten said.

In the long term, he said it’s inevitable that people will become infected with coronavirus.

He said the population immunity due to vaccinations and infections will at some point be so strong that the virus will become less important. “Then we will be in an endemic state,” said Drosten. In the worst case, however, this could take “several more winters”.

However, Drosten warned against people trying to deliberately infect themselves with Covid, saying getting the infection in summer doesn’t mean people will be protected in winter. 

Drosten himself said he has not yet contracted Covid-19.

“So far, I guess I’ve just been lucky,” he said. “I rarely put myself in risky situations, but I’m not overly cautious either.”

‘Pandemic depends on behaviour’

According to the Robert Koch Institute (RKI)’s latest weekly report, more outbreaks are occurring in care homes, and the number of patients in intensive care units is slightly rising as infections go up. 

The institute said there had been a 23 percent increase in the 7-day incidence compared to the previous week. On Friday the 7-day incidence stood at 618.2 infections per 100,000 people. There were 108,190 infections within the latest 24 hour period and 90 deaths. 

“The further course of the pandemic depends not only on the occurrence of new virus variants and the uptake of vaccinations on offer, it also depends to a large extent on the behaviour of the population,” said the RKI.

According to the DIVI intensive care register, the number of Covid-19 patients in ICUs had increased to 810 on Thursday this week, from about 600 at the beginning of the month.

However, that number is still low compared to previous Covid peaks when thousands of people were in intensive care in Germany.