Rents in major cities in Germany continue to rise. In Munich rents have risen by 20 percent in the past five years alone.
The rising rents in connection with the limited living space leads to a tense situation on the housing markets. According to real estate experts, the trend towards home offices could bring relief to the tense housing markets.
“Working from home could make a larger area around the metropolises attractive,” says Michael Voigtländer, real estate expert at the Institut der deutschen Wirtschat (IW). Above all, this offers opportunities for rural regions. Because if you only had to come to the office twice a week, you could also take another commute. However, on one condition.
Infrastructure must be given
In order for people to prefer the rural region to the big city, a good infrastructure is required there. People should be able to send their children to school or to day-care center as close as possible. Certain conditions such as fast internet, cultural offers and medical care should also be available. Voigtländer does not expect a run on the countryside, however, because service jobs that attract highly qualified personnel arise in the cities. Therefore, in his opinion, the metropolitan areas tend to remain attractive, “but the catchment area of the metropolises could expand”, which would make the surrounding area more attractive. This could slow real estate price increases in large cities.
Home office trend will probably continue even after the pandemic
In the course of the COVID-19 pandemic and the associated lockdown, many companies introduced the home office for their employees, albeit often by force. As the Institute of the German Economy calculated, in 2018 office workers subject to social security contributions worked on average around 11 percent of their working time in the home office. A survey by the Munich-based Ifo Institute of 800 HR managers has now shown that around 47 percent of companies that rely on home office during the pandemic would like to expand this in the future. 64 percent of companies would like to incorporate more virtual conferences in the future.
Shift in housing demand depending on the sector
The real estate specialist JLL also sees a permanent increase in the home office as the possibility that demand for housing will change. Due to the high housing cost burden in the cities, the high price differential makes the surrounding regions more attractive. This could possibly outweigh the costs of a longer commute, says Helge Scheunemann, an expert at JLL.
According to JLL, in addition to the price differential, transport connections and the structure of the industry play an important role, on which the size of the apartments in demand depends. Due to the high proportion of office and service jobs, there is a lot of potential for a shift in demand for apartments in Munich, Cologne, Düsseldorf, Frankfurt and Darmstadt. In regions where there are many jobs in production and home offices cannot be implemented, such a shift is unlikely.
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