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The housing sector and the housing market
Article Building & Housing
The property sector is one of the largest industries in Germany.
Annual building investments amount to more than the federal budget. Housing construction accounts for the highest proportion of that by a considerable margin, representing more than half.
There are more than 41 million residential dwellings in Germany, almost half of which are owner occupied. Rental markets in Germany are highly diverse. Some two-thirds of rented accommodation is rented from private landlords. Local authorities and local authority housing companies, private housing companies and housing co-operatives are also major players in the housing market, with clear regional differences in provider structures.
The growing demand for housing in municipalities means that rents and purchase prices in major German cities and numerous university towns have increased considerably in recent years. As a result, increasing numbers of households are having difficulty finding housing that they can afford. The only way to meet demand is to increase new housing construction while at the same time ensuring that housing remains within the means of people in the middle and lower income brackets.
In addition, the housing and property market in Germany is currently undergoing structural change and has become a more attractive prospect for many investors. This applies both to international funds and corporations and to private investors, who are investing in property due to low interest rates. Growing demand from investors and tenants leads in some cases to major increases in the rental and purchase prices offered for flats and houses.
As a result, more new construction and more investment in existing housing stock are necessary, first and foremost at the lower end of the rental market. The challenge is to provide new housing in those areas where the need is greatest, and to make sure that housing is also available for those in middle and low income brackets. Energy-efficiency criteria and the availability of age-appropriate accommodation must also be taken into account.
