Context and Origin of the Report
The study “Migration und Wohnen: Ökonomische Effekte und soziale Implikationen” is an expertise prepared for the Sachverständigenrat für Integration und Migration by the Institut der deutschen Wirtschaft Köln (e.V.) (IW). The IW is a private German economic research institute that promotes a liberal economic and societal order. The authors, Dr Pekka Sagner (Senior Economist for housing policy) and Prof Dr Michael Voigtländer (Head of the International Economic Policy cluster), bring extensive expertise in housing economics, migration analysis and policy evaluation.
Key Findings on Housing Market Trends
The German housing market has shifted from a prolonged stagnation in the 2000s to persistent scarcity since the 2010s. Drivers include a positive net migration balance, concentrated internal migration, rising household incomes and a long‑lasting low‑interest environment, which was disrupted by a sharp interest‑rate increase and a decline in construction activity after 2022. Germany remains a “rental nation” with a home‑ownership rate of roughly 47 %, well below the EU average. Household numbers continue to grow, especially in economically strong cities, intensifying demand.
Ownership versus Renting and Migration Background
Across the observation period, migrants and non‑migrants experience almost identical nominal rents. However, households with a direct migration background bear a higher housing‑cost burden. In 2022, migrant renters spent about 29 % of net household income on housing versus 26 % for non‑migrants. Migrant owners incurred roughly 15 % of income on housing compared with 9 % for native owners. The relative disadvantage amounts to 1–2 percentage points higher burden for migrant households, a pattern that persists for both renters and owners.
Socio‑Economic Disparities in Living Space
Average living space per capita rose from around 43 m² in the mid‑1980s to about 59 m² in 2022. Yet gaps remain: owners enjoy larger spaces than renters, and households without a migration background have more space than those with one. In 2022, owners without migration background averaged roughly 72 m² per person, while migrant owners had about 54 m². For renters, the figures were approximately 53 m² versus 40 m² respectively.
Overcrowding and Subjective Housing Satisfaction
Overcrowding is measured by the number of rooms being fewer than household members. Nationally, 6 % of households are overcrowded, but the rate climbs to 15–20 % among migrant renters. Subjective assessments show that 6 % of migrant renters consider their dwelling “much too small” and 23 % “somewhat too small,” far exceeding the 2 % and 16 % reported by non‑migrant renters. Owner households report far lower dissatisfaction rates.
Construction Shortfalls and Future Demand
The report forecasts a continued need for new dwellings. Between 2021 and 2025, an annual average of 372 000 units was required; this declines to about 302 000 per year up to 2030 and further to roughly 260 000 by 2035. Berlin, Hamburg, and the larger city‑states exhibit the highest per‑capita demand, with Berlin needing over 30 000 new units each year. Overall, only about 79 % of the required housing stock has been built in recent years, highlighting a supply gap.
Policy Recommendations for Sustainable Housing
To alleviate scarcity, the authors advocate faster planning and permitting processes, increased construction productivity, standardised building methods and better mobilisation of developable land. Targeted demand‑side measures, such as precisely targeted housing allowances, are recommended to support vulnerable groups without distorting market incentives. Social housing should be allocated preferentially to households facing access problems, while overly strict rent controls risk further suppressing supply.
Implications for a Pan‑European Sustainable Housing Audience
The German experience underscores the intertwined nature of migration, housing affordability and sustainability. Rising demand coupled with limited supply amplifies cost burdens, especially for migrant households, and drives overcrowding—issues that resonate across Europe. Sustainable solutions require coordinated policies that expand affordable supply, enhance construction efficiency and ensure equitable access, thereby supporting both economic integration of migrants and broader environmental goals.