Overview of the Study
The paper âZu den Ursachen der Misere am Wohnungsmarktâ is a working paper published by empirica ag, a research institute based in Berlin and Bonn that focuses on housing market analysis and policy advice. The research was authored by Prof. Dr. Harald Simons, a senior economist at empirica ag with extensive publications on market dynamics and housing economics. The study investigates why a pronounced housing shortage exists in Germany despite an overall increase in the stock of dwellings since 2011.
Key Findings on Market Imbalance
Empirica ag finds that only about 10â12 % of the total housing stock is âmarketârelevantâ â i.e., apartments that are newly rented or become available through turnover. In this segment, demand consistently exceeds supply in many metropolitan areas, leading to higher newâcontract rents and longer search times. The authors highlight that traditional metrics, which compare total apartments to households, mask the shortage because they ignore âunrealised demandâ from households that already occupy a home but are still searching for a better one.
Data on Supply, Demand and Price Trends
Between 2011 and 2024, the number of dwellings grew by 7.7 % nationally, outpacing population growth of 4.0 %. Nevertheless, average market rents rose by 62 % (from âŹ6.22/m² to âŹ10.10/m²) in the overall housing stock and by 67 % in independent cities. At the same time, the share of households actively looking for a home fell to roughly 8â12 % of all households, concentrating pressure on the small pool of marketârelevant apartments. In Cologne, for example, 39 500 new apartments were built, yet 110 000 households were still searching for a home in 2024.
Causes of âHiddenâ Shortage
The paper identifies three main mechanisms that create a shortage from ânothingâ: (1) housing hoarding, where tenants keep underâmarketârate contracts and do not release apartments; (2) unrealised demand, where households maintain a residence while simultaneously seeking a new one; and (3) low mobility, reflected in a declining internal migration rate (from 7.7 % to 6 % of the population). These factors cumulatively generate a mismatch where the number of households looking for a free unit can be three times the number of units actually on the market.
Implications for Sustainable European Housing
Empirica ag concludes that addressing the shortage requires more than simply increasing the total housing stock. Policies should aim to improve turnover rates, reduce hoarding incentives, and encourage the conversion of existing, underâused dwellings into marketârelevant supply. Sustainable solutions include promoting flexible leasing contracts, supporting renovation of older units to meet energyâefficiency standards, and coordinating regional housing strategies to balance supply across metropolitan and peripheral areas. The study underscores that a nuanced understanding of marketârelevant supply is essential for effective, environmentally responsible housing policy across Europe.