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Affordable Housing Crisis in Germany for Expats

There is an affordable housing crisis for both expats and locals in Germany, with the problem concentrated in cities such as Munich and Berlin.

At least a third of German cities now suffer from severe affordable housing shortages which are particularly acute in the mega-cities of Berlin, Cologne and Munich.

Approximately two million new homes are needed. Chancellor Merkel have promised an additional 100,000 affordable apartments which are aimed at low wage earners. This will cost the state approximately five billion euros. However, the issue also seriously affects top expat earners.

A story was reported by Emigrate describing one individual who spent huge sums of money on AirBnB rentals after relocating from Berlin to Cologne. They were then forced to return home at weekends, leaving clean laundry stored at the office and other possessions hidden in a car which was kept outside of the city.

One of the most significant reasons for the dearth of rental accommodation is that the German housing market stands in contrast to others in Europe. Half of the country’s citizens rent rather than buying a property and house prices are sharply rising due to the rental crisis, both for locals and for overseas property investors.

The government has therefore relaxed building regulations to increase construction, however this will not benefit expatriate professionals. This is because such properties will be aimed at local workers who are on far lower salaries and often have families to support.

It also does not fix other property shortage issues, such as the extremely high price of land coupled with the slow processing of building applications in the country.

All of these factors combined mean that Germany is currently a problematic market for overseas property investors, with high prices and high competition. However, demand is thriving, so those who can find suitable property to invest in could benefit from a very strong rental market.

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