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5mo ago

Germany Faces Housing Crisis with Rising Rents and Limited Supply

Experts predict significant rent increases in 2025 as housing shortages persist, while homeownership remains out of reach for many despite lower mortgage rates.

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Overview

  • Rents in Germany are expected to rise sharply in 2025, driven by high demand, limited housing supply, and inflationary pressures.
  • New housing construction remains stagnant, with only 250,000 to 255,000 units expected in 2024, far below the government’s target of 400,000 annually.
  • Germany’s homeownership rate remains the lowest in the EU at under 47%, with many renters struggling to afford rising costs.
  • While home prices have stabilized and slightly increased after a 2023 decline, high construction and renovation costs continue to deter buyers.
  • Falling mortgage rates have improved financing conditions, but experts caution that a broader real estate boom is unlikely due to weak economic conditions.