Germans’ generous living space - and what to do about it

Despite Germany’s widely acknowledged housing shortage - particularly in the bigger cities - Germans have significantly more living space on average than they did 30 years ago. This can be both a blessing and a curse at the same time.

Figures released recently by the Federal Statistics Office show that at the end of 2021, each person had an average of 47.7 sqm of living space and 2.3 rooms in which to live. This is about 37% more than what they had in 1991, when people on average enjoyed 34.9 sqm per head, and 1.8 living rooms. Over the period, the average size of an apartment has risen from 82 sqm to 92 sqm, say the statisticians.

Even over a shorter time frame, the amount of living space per person has been increasing. Data released early in 2022 by researcher Empirica Regio showed that, despite the emerging housing crisis over the period, between 2015 and 2020, living space per capita increased by 3,7% in rural regions and by 1,5% in cities.

For its analysis, Empirica Regio examined data from all different housing types across German municipalities with more than 400 inhabitants - including both owner-occupied houses and rental properties in 9.000 rural municipalities and 107 urban districts.

Not surprisingly, those living in rural districts had the most space in 2020, at 51.4 sqm per occupant. In cities, it was significantly lower at 40.9 sqm per capita. In smaller cities and suburban areas, the average was around 47 sqm per inhabitant. The overall national average was 46 sqm. These figures largely correlate with the more update data from the Federal Statistics Office.

This increase in living space per capita is a long-term trend that has been continuing steadily since 2005, with the exception of the year 2015. According to a study conducted in summer 2021 by DZ Bank, each year the average home size in Germany increases by 0.2 sqm. In 1995, for example, the average home size was 36 sqm per person - 20% percent less than in 2020.

Despite the fact that larger homes have their disadvantages - namely, they consume more energy and emit more greenhouse gases - experts do not expect the trend to reverse. “The growing number of single-person households and the desire for spacious apartments - which had increased due to the pandemic - should continue to drive the growth in space,” DZ bank wrote. For example, the fact that more people are now working from home is driving demand for more living space.

So, where do people have the most living space? The typical community with the most living space of more than 65 square meters per capita usually has up to 1,200 inhabitants, is located in the countryside and suffers from out-migration. Top of the list in the Empirica Regio study of 2021 were Beuren in the Eifel (75.2 sqm) and Aventoft in Schleswig-Holstein (73.6 sqm). Locations on the islands of Sylt and Föhr also scored highly, but because of the high proportion of vacation homes, these were filtered out of the study.

In contrast, people in Raunheim in Hesse and Bliesdorf in Brandenburg had particularly little living space, with 34.3 square meters per capita. At the bottom of the list are also many medium-sized and large cities - such as Stuttgart (37.6 sqm), Frankfurt (37.4 sqm) and Offenbach (35 sqm). In Berlin and Cologne, the average living space per capita has stagnated at 38.9 sqm for years. “In general, people in tight housing market regions and the major metropolitan areas have to squeeze into less living space per capita,” the authors wrote.

With the exception of 2015, when an unusually large number of people immigrated during the refugee crisis, land consumption has risen steadily since 2005, Empirica Regio said. On average, 0.2 sqm per year were added. The high demand for living space is an ongoing issue in Germany, for example about the sealing of soils and the energy balance of buildings. There are constant ongoing debates about whether single-family homes are still in keeping with the times. There are now widespread attempts at a political level to limit their construction.

In addition, fewer and fewer people are living in one apartment, partly because society is aging and the number of single households is rising. Since the beginning of the 1990s, the proportion of single-person households has risen significantly, according to a study by the Institute of the German Economy (IW). In 2020, there were fewer than two people per apartment on average, according to the Federal Statistical Office.

How to get older people to move out of their spacious apartments?

Professor Dr. Steffen Sebastian of the IREBS at the University of Regensburg has for some time been at the forefront of an argument in Germany that says that there is no overall shortage of housing in Germany. He says there is theoretically no need for new apartments to be built if we could simply distribute the existing housing stock better.

This sounds heretical at first. But it does highlight an anomaly in the German residential rental market that cannot be completely ignored, and is drawing the attention of academics and even entrepreneurs to look for a way to resolve it. In a nutshell, it is this. While many new tenants are paying top rents to secure hard-sought apartments, many existing tenants, who’ve lived in their current apartment for decades, are in many cases still paying a peppercorn rent for what are often generously-proportioned dwellings. They may have no incentive to move out - ever - because they could never afford the new rents prevailing on the market.

In many instances they’ve raised their families in these houses or apartments, and they now have far too much space for their needs. Cleaning and maintaining these dwellings may be proving burdensome, but the alternative - of voluntarily downsizing - isn’t a realistic option.

Prof. Sebastian’s idea sounds very radical for socially-minded Germany, and it is this. If these elderly peoples’ rent were to rise significantly, they would be encouraged to move into smaller apartments. Their large apartments would then become available for young couples with children, or house-shares, or other forms of communal living. Existing long-term tenants would have to lose much of their protection, by the abolition of the cap on maximum permissible rent increases (Mietspiegel), for example. In tight markets, such rent increases have been limited to a maximum of 15% over a three-year period. In practice, however, many rents on these long-term leases have rarely or ever been raised, beyond a minimal annual increase.

There is still a shortage of accurate data on the extent of this problem. But a recent study by the IW Köln (Institute of the German Economy) suggests that 6% of tenant households in Germany live very generously, defined by having three rooms more available than they have household members. This ratio rises to 9% among the over-70s.

So even when such households would like to live with less space, to make their living more manageable, they are hindered from doing so by the much higher rents now prevailing for even a much smaller apartment than they are currently occupying.

How significant is this problem? A recent study by owners’ association Haus & Grund, which collects a lot of data on the length of leases among its members, shows the average duration of a tenancy by 2021 was 8.7 years. But 27.3% of tenants had lived in their apartments for more than ten years, in many cases a lot longer. In more than half of these tenancies the rent had never been raised.

As we report elsewhere in this issue, landlords are in many cases taking matters into their own hands by renting out their apartments as furnished, to circumvent the limitations of the Mietspiegel. There are countless other blind spots in the German rent index system which permit landlords to ignore the local Mietspiegel and in effect command the market rate.

As the debate rages, there have been tentative steps to introduce the concept of apartment swaps to alleviate the problem. In Berlin, state-owned housing companies have set up a portal, “inberlinwohnen.de” to encourage tenants to consider swapping, with advantages to both sides. But the take-up in practice has been poor. Freiburg has a swap meet which offers participants a financial reward to relocate. From what we hear, it’s not working so well because the demand for larger apartments far outweighs the demand from those looking to downsize.

A new portal, Immowexler, might help to progress Professor Sebastian’s ideas further. The portal offers a matching algorithm which makes it possible to find not only two potential exchange partners, but even up to four parties with exchange options. Chief Technology Officer Lars Ludwig says, “Our algorithm can not only combine people who are interested in swapping, but also integrate individual sellers and sellers and buyers.”

An example would be where party A takes over party B’s apartment. Party B moves into Party C’s apartment, which takes over Party D’s property, which in turn gets Party A’s apartment. This can obviously get complex, but Immowexler offers a total package for the exchange, and cooperates for it with different companies. These services include a financing consultation, safe notarial contracts where there are several exchange partners, and removal assistance.

Julia Niepold, Immowexler’s Chief Product Officer, acknowledges the problem that older people have shown little interest in fully participating in this or other similar schemes, given their low rents for comparatively large apartments. She believes that soaring energy costs could prove a catalyst for change, where few other arguments have proved persuasive in the past. Let’s hope she’s right.