A persistent shortage of housing is expected to continue in Germany for at least the next decade, according to an assessment by the Ifo Institute. Ludwig Dorffmeister, a construction expert at the Ifo Institute, told “Bild” newspaper that the current state of the housing market is unlikely to see significant improvement in the medium term. He anticipates a tense situation persisting until at least 2030.
The institute forecasts the completion of 205,000 new housing units for the current year. However, projections indicate a decline to approximately 185,000 units in 2026, representing the lowest figure recorded since 2009. Estimates for 2027 and 2028 stand at 190,000 and 195,000 completed units, respectively.
Dorffmeister attributes these low figures primarily to significantly increased construction costs, which are discouraging new building activity and reducing the number of building permits issued. “Many construction projects simply aren’t financially viable” he stated. He further noted that regulatory limitations on rental costs also contribute to the unattractiveness of construction projects for developers.