Housing shortage in Germany: What other countries are doing better and what we can learn from them

Housing shortage in Germany: What other countries are doing better and what we can learn from them

According to a report from www.focus.de, building new apartments in Germany is becoming increasingly difficult due to rising interest rates and rising building material costs. Construction experts fear that at best 250,000 new apartments will be built this year and only 200,000 next year. Particularly in large cities, the lack of affordable housing leads to rising rents, even though purchase prices are falling.

However, the construction crisis in Germany is not an isolated case. According to a study by the British building association HBF, Great Britain has the lowest ratio of available living space per capita among all 38 OECD countries. Similar problems also exist in other developed countries such as the USA, China and Canada.

An interesting example is New Zealand, which introduced new planning rules to encourage housing construction. In the city of Auckland, previous settlements for single-family homes were designated as mixed zones in which multi-family homes could also be built. As a result, Auckland's housing stock rose five per cent more by the end of 2021 than without the changes. Rents there rose by only 20 percent compared to other cities in New Zealand and, adjusted for inflation, even fell by an average of two percent per year.

Singapore has also successfully created affordable housing with its state housing and strict restrictions for foreigners. Singapore's government builds houses itself and sells citizens a 99-year right to live in them. The state authority HDB now houses 78.3 percent of all people in Singapore. However, the model cannot easily be transferred to Germany due to the special political situation in Singapore.

In Japan, homes are built quickly and with fewer regulations, resulting in lower rents. However, the quality of living suffers due to the loose regulations.

There are other concepts to combat the housing shortage in other countries. Canada is trying to limit the number of foreign workers and students to reduce demand for housing. France plans to develop “15-minute cities” where people can reach all major locations within 15 minutes on foot. The Netherlands has introduced strict building regulations to combine affordable construction methods and sustainability.

In Germany, various approaches from these countries could be adopted. For example, building more social housing using the Singaporean model would be one way to at least partially solve the construction crisis. In addition, relaxed regulations and faster approval processes could speed up housing construction. However, it is important to take into account the specific conditions of the German real estate market.