German resi market to see rising vacancy rates – study
That there is any vacancy left at all in Germany's urban residential housing markets may still come as a surprise given the relentless news stream about housing shortages, rising rents and housing prices across Germany. And it is indeed true that in the hottest markets the vacancy levels are at rock-bottom, and could best be described as 'frictional vacancy'.
Property adviser CBRE and research group Empirica have just published their latest Vacancy Index, which covers the status in the market at the end of 2015. Likewise, calculations by the Bundesinstitut für Bau-, Stadt- und Raumforschung (BBSR) – the Federal Institute for Research on Building, Urban Affairs and Spatial Development - estimate the total national vacancy rate at 4.5%.
The CBRE/Empirica study includes only apartment units that are available for rent, now or imminently, meaning their figures will differ from the raw material from BBSR. CBRE/Empirica show the vacancy rate for apartments fell by 3% on December 31st, or about 622,000 units. This is about 10,000 units less than in 2014 and a full 125,000 less than five years ago.
The BBSR figures point to 1.8m empty apartments across the country, down from 2m (5%) in 2014. The states with the highest vacancies were Saxony-Anhalt (11.3%), Saxony (10.1%) and Thüringen (8.4%).
However, vacancies are expected to rise again between now and 2020 – largely because the vacancy rate in growth regions cannot drop much lower and is beginning to rise in the areas which offer little economic prospects and continue to lose population.
According to Reiner Braun of Empirica, "Outside of the growth regions, we already have more than 300,000 vacancies on the market, and that number could more than double by 2020."
The lowest vacancy rates are currently found in Munich (0.2 %) as well as Münster and Frankfurt (both 0.5 %). In Leipzig (-4.4 points) and Halle/Saale (-2.4 Punkte), the vacancy rate has dropped by more than two percentage points since 2010. In general, apartment vacancies are higher in the eastern states (at 6%) than in the western states (2.4%), with the lowest vacancies in Schleswig-Holstein (3.4%), Baden Württemberg (3.5%) and North Rhine-Westphalia and Bavaria (3.8% each)
According to Michael Schlatterer, team head of residential valuation at CBRE Germany, "More indicative than any East-West differences here are trends in regions with shrinking or growing populations." Clearly, he says, vacancies are rising again in areas with shrinking populations, and now average 6.9%, as against 2.1% in growth regions.
In the biggest cities, such as Berlin, Hamburg, Munich and Frankfurt, the vacancy rate is effectively zero. The highest vacancy rates overall are in Salzgitter (9.8%, down 1.7%), Pirmasens (9.3%, down 1.4%, both in the the west), then Chemnitz (8.5%), Schwerin (8.4%) and Halle/Saale (8.0%).
The CBRE/Empirica study claims that with the new arrivals of asylum seekers, the annual demand for new-build apartments will rise from 286,000 to 361,000 annually between 2017 and 2020.