Housing shortage in Germany: Government promises quick solutions!

Housing shortage in Germany: Government promises quick solutions!

In Germany, the challenges when looking for accommodation are obvious, especially in metropolitan areas. Rents and construction costs are rising rapidly, while there is a risk of oversupply in rural areas. The high demand meets a limited supply, which makes it difficult for many people to find a suitable apartment or house. Lukas, a person affected, illustrates the difficulties that arise without family support or inheritance. This problem requires urgent action from the federal government.

To counteract the housing shortage, the federal government recently took several steps. This includes the extension of the rent cap until December 31, 2029. According to the new law, which came into force on July 23, 2025, rents for re-letting may not be more than 10% above the local comparative rent, unless the apartments are new buildings or extensively modernized apartments. Chancellor Merz described affordable housing as “one of the most important social issues of our time” in a government statement in May 2025.

Measures to create living space

In parallel to the rent cap, the federal government also plans to promote the creation of living space. Part of this is the so-called “construction turbo”, which is intended to enable faster approvals for new buildings, as well as making it easier to expand and convert existing buildings into living space. Around 110,000 new apartments were already approved in the first half of 2025, an increase of 2.9% compared to the previous year. Single-family homes are also showing a slight upward trend, but at a still low level.

In big cities, conditions remain tense for many people, like Olivia, who has specific ideas about her ideal city life. Lukas, on the other hand, is looking for living space in the countryside, close to his place of work and with good infrastructure. The government theoretically sees enough living space in Germany, but this is often neither geographically nor financially well distributed.

Economic burdens and prospects

Andreas Pfnür from TU Darmstadt expresses the expectation that the housing shortage will remain mainly in metropolitan regions until 2040. In this context, many people have concerns about the financial burden that comes with building or purchasing real estate. While Olivia is willing to forego certain demands in order to realize her dream of owning her own home, Lukas considers what compromises he can make in order to realize his dream home.

Politicians must now act not only to tame rents, but also to ensure a fair distribution of living space. The coming years will be crucial in ensuring affordable housing for families, pensioners on low incomes and young people in Germany.

For further details on the rent cap and the housing market situation, see daily news and Federal Government.