Is the dream of owning a home bursting? Why the construction of single-family houses in Germany is stagnating

Your own detached house with a garden: this is what many people dream of. However, the construction of such single-family homes has been stagnating for over a decade. The reason for this is supposed to be a certain phenomenon.

Building permits 2020

As the Federal Statistical Office reported on February 25, the construction of single and two-family houses is stagnating – and has been since 2005. The authority also announced that in the period from January 2020 to November 2020 the construction of 288,000 apartments was approved, of which 169,000 to be built in apartment buildings. This means that only 109,000 of the 288,000 approved properties are single and two-family houses.

Why is that?

Economists and real estate experts see the disparate population development in urban and rural regions as the main cause of these developments, according to experts from the weekly magazine Stern. According to this, tens of thousands are looking for affordable apartments in metropolitan areas such as Berlin or Munich, while countless properties in rural areas are empty – where most one and two-family houses are located. According to the Federal Institute for Building, Urban and Spatial Research (BBSR), a total of 1.7 million apartments were vacant in rural areas at the end of 2018, while the population of large cities rose by 1.7 million between 2010 and 2019. As space researcher Alexander Schürt and his co-authors of the BBSR also state, 45 percent of German small and medium-sized towns lost their inhabitants at the same time.

What planning alternatives are there?

As Michael Voigtländer, real estate expert at IW Köln, told the Leonberger Kreiszeitung newspaper, building new single-family houses in rural areas makes little economic sense. “The goal of shrinking regions must be to promote internal development and not always designate new building areas for single-family houses. Ultimately, this does not stop the population decline and will always create new vacancies in the future, ”he explains. The attractiveness of rural areas depends on offers such as jobs and universities that currently do not exist due to past failures.

City center property prices are skyrocketing

The population growth in the cities can be observed more intensely since the 1990s – nevertheless, the federal as well as state governments and municipalities reacted only very late to this increase, so that the number of newly built apartments throughout Germany continued to decrease until 2009, according to the Stern. Experts see the lack of housing in the cities as a catalyst for the explosive rise in property prices over the past decade. Despite the pandemic, however, no trend reversal can be observed, as stated by Voigtländer: “At the moment, the surrounding communities benefit very much, but in the end everyone wants to live close to a big city.”

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