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Germany Faces Severe Housing Shortage, Projected too Worsen
Germany is grappling with a important housing shortage, with an estimated 1.4 million missing homes as of late 2024, according to the Pestel Institute. The situation is not expected to improve in the near future, and is increasingly acting as a drag on the German economy. Baden-Württemberg, a state in southwestern Germany, faces a deficit of 196,000 homes.
National housing Needs and construction Rates
The Pestel Institute estimates that between 2025 and 2030, Germany will need up to 362,000 new homes in Baden-Württemberg alone, requiring an annual construction rate of approximately 60,300 units. Staatsanzeiger reports that current construction rates are far below this level, with the institute forecasting only around 200,000 new homes built nationwide each year – roughly half the required amount.
Economic Impact and Demographic Challenges
the housing shortage is now considered a significant impediment to economic growth. Without increased housing construction, Germany risks hindering its ability to attract workers and overcome current economic stagnation. Recent economic data shows Germany experienced a slight economic contraction in late 2023, highlighting the urgency of addressing structural issues like housing.
Who is Most affected?
The study, commissioned by the Bündnis Soziales Wohnen (Social Housing Alliance) – a coalition including the German Tenants’ Association (Deutscher Mieterbund) and the IG Bau construction union - reveals that young adults under 25 and senior citizens are disproportionately affected by the housing crisis. Young people are increasingly finding themselves at a disadvantage in
