“The alarm bells of the housing shortage have not rung as loudly as they are now for a long time,” German Tenants Association President Lukas Siebenkotten told newspapers in Germany’s Funke Mediengruppe on Thursday. 

The situation on the housing market is becoming “increasingly dramatic,” he added.

According to research, the housing shortage in Germany is the worst it has been in 30 years. Nationwide, the housing deficit reached around 700,000 homes by the end of 2022, the study by the Hanover-based Pestel Institute and the Schleswig-Holstein-based institute Arbeitsgemeinschaft für zeitgemäßes Bauen Kiel (Arge) found. 

The federal and state governments must now turn the tide – “or we will experience an unimagined disaster in the housing market”, Siebenkotten said. He expects 2023 to be a “very tough year for tenants”. 

READ ALSO: Why falling property prices in Germany mean tougher times for tenants

According to the study, the high influx of refugees who fled to Germany after Russia’s invasion of Ukraine have put a strain on the already tense housing market. 

High inflation, increased investment costs and the associated slump in construction activity has also had a negative impact on the number of new homes being built. 

Germany’s coalition government, made up of the Social Democrats (SPD), Greens and Free Democrats (FDP) had promised to build 400,000 new homes per year when they took office in 2021, but that hasn’t happened. The construction association ZDB recently said it expected 245,000 new units to be built in 2023.

On a local and national level, Germany has struggled to curb soaring rent costs even with rent controls in some areas. Meanwhile, a move by the Berlin state government back in 2020 to freeze rents for five years (the so-called Mietendeckel) turned into a fiasco when the rent cap was deemed “unlawful” by the constitutional court and was overturned. It resulted in tenants having to pay landlords back for rent arrears and some were forced to find another flat that they could afford.

The IG BAU construction union said it saw a contradiction between the housing problems and the German government’s plans to significantly increase the number of skilled workers who can come to Germany from abroad.

“Housing and work – they belong together,” deputy union head Harald Schaum told the Funke newspapers. “No one will come (to Germany) if they cannot live here, or can only do so at horrendously high rents.”

READ ALSO: What experts say will happen to the German housing market in 2023

Vocabulary 

Housing market – (der) Wohnungsmarkt 

Housing shortage – (der) Wohnungsmangel 

Strain – (die) Belastung

Contradiction/discrepancy – (der) Widerspruch

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