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Residential buildings in Frankfurt am Main: "If this continues, we will soon have no vacancies at all in the big cities"

Photo: Marc-Steffen Unger

The housing shortage in Germany is getting worse. Recently, the already low vacancy rates in cities have fallen even further, as a previously unpublished study by the research institute Empirica shows. According to the report, around 2022,554 apartments were vacant in Germany at the end of 000, which is 53,000 fewer than in the previous year. It's the biggest decline in 22 years. The vacancy rate is 2.5 percent. "If this continues, we will soon have no vacancies at all in the big cities," says Empirica CEO Reiner Braun.

The main reason for this development is the massive influx of Ukrainian refugees. Since these are evenly distributed across the country, for the first time in the 22-year history of the survey, there is not a single district with an increasing vacancy rate. "As a result, rents for new leases are rising faster than ever and purchase prices are falling less sharply than would have been expected from the steep rise in interest rates," says Braun.

There is a large east-west divide in terms of vacancies. In East Germany excluding Berlin, the rate was significantly higher at 5.8 percent than in the West at 1.9 percent. If you look at the values at the city level, the gap widens even further. In Munich, only 2022.0 percent of apartments were vacant at the end of 1. In Frankfurt am Main, the vacancy rate has fallen from 2017.0 to 4.0 percent since 2. On the other hand, apartment seekers have more choice in Pirmasens, Frankfurt (Oder) and Dessau-Roßlau, where the vacancy rate was over eight percent.

Although hundreds of thousands of new apartments are needed in Germany, less and less living space has been created recently: In September, the number of building permits fell by 29.7 percent compared to the same month last year to 19,300. From January to September, there was a drop of 28.3 percent to 195,100 apartments.

"High construction costs and poor financing conditions are likely to have continued to be the main contributors to the decline in construction projects," according to the Federal Statistical Office. The German government originally set itself the goal of 400,000 apartments per year in order to meet the growing demand, especially in large cities.

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