Germany has a growing need for housing. Among the manifold reasons for this are increasing prosperity and steady urbanisation. While in many rural areas there is too much new building, in the large conurbations and in many university towns there is a serious shortage of housing.
The need for housing is driven by a number of factors. There is a need for new homes due to demographic developments, a need to replace buildings which have become uninhabitable or been converted to other uses, and a need to make up for the lack of home construction in the past. The IW Housing Needs Model shows at the city and county level how many homes are required to meet these needs.
The need for home-building is steadily increasing in Germany as each person comes to require more floor space. While the population is becoming more prosperous and can afford larger homes, the average household has fewer and fewer members. People are moving in large numbers from the countryside to the city and it is in the big cities that the many recent immigrants to Germany prefer to settle. The need for housing is thus not spread evenly across the republic. While in many rural areas there is too much new building, in the large conurbations and in many university towns there is a serious shortage of housing. The task now falls to policy-makers and the real estate sector to meet the high demand for housing in the bigger cities. While it is essential that more building land be made available, the planning agenda must also include densification and extensions and conversions of existing buildings.