Immigration with consequences
IW: Calculations on housing needs do not add up
14.06.2024, 11:37 a.m.
Listen to article
This audio version was artificially generated. More info | Send feedback
Achieving the annual target for new housing is already a challenge for the construction industry – especially in large cities. Now the demand has to be adjusted again. Economic experts have underestimated the immigration resulting from the war in Ukraine.
The need for new houses and apartments is higher than originally calculated due to the recent significant increase in immigration to Germany. In the period from 2021 to 2025, 372,000 new apartments would be needed annually and not 308,000 as initially estimated, according to the Cologne Institute for Economic Research (IW). In the years 2026 to 2030, the need will be 302,000 new apartments annually.
According to statistics, 294,400 apartments were completed last year. This year, the construction industry expects around 235,000 apartments to be completed.
In relation to annual demand, current construction activity (2021 to 2023) in Germany is only 79 percent, calculated the IW. The shortfall is particularly high in the country’s seven largest cities. There, the ratio of current and required construction activity is 59 percent.
Little is happening in Stuttgart and Cologne
According to the IW study, construction activity is lowest in Cologne and Stuttgart. In the period from 2020 to 2023, only 37 percent and 43 percent of the required apartments were newly built there, respectively.
The German Economic Institute had estimated immigration to be much more moderate due to the corona pandemic. However, since February 2022, 1.3 million refugees from Ukraine have arrived as a result of the Russia-Ukraine war, the researchers emphasized. In total, immigration was therefore underestimated by 1.5 million people.
The IW called for short-term impulses and structural reforms to improve the situation on the housing market. Expert Michael Voigtländer mentioned simplified building regulations or the designation of more building land in the municipalities in the newspapers of the Funke media group. Federal states should think about reducing the property transfer tax.