The flood of refugees fleeing Ukraine as a result of the Russian invasion shows no sign of abating. How high the final amount will turn out to be is anybody's guess, but It's going to be very high.
A new study published this week by research institute Empirica on behalf of real estate industry lobby group ZIA puts the expected figure for Germany at up to 1.29 million refugees, and a short-term need of up to 500,000 additional flats required to house them.
Based on three different scenarios, from lowest to highest, at the lowest level of 310,000 refugees, the need would be for 120,000 additional housing units. The middle scenario would be for 810,000 refugees and demand for 310,000 units, up to 500,000 additional units in the case of 1.29 million. Almost half of the demand for housing in any one of the three scenarios would have to be met by new construction.
Ukrainians have a comparatively high level of education and a high level of female involvement in the workforce - hence, Empirica assumes that the new Ukrainian arrivals can be quickly integrated into the labour market. Given the current local shortage of skilled workers and the speedy issuing of work permits to the new arrivals, there is probably a realistic assumption that many refugees are likely to be drawn to places where there is already a shortage of housing, and may well, in their search for a place to live, exacerbate an already stretched housing situation.
Given the huge numbers involved, ZIA has already loudened its call for Chancellor Olaf Scholz to convene an emergency summit to deal with the reception and care of the refugees, involving the federal government, the sixteen individual states, local councils, aid organisations and the business community.
Andreas Mattner, president of the ZIA, said: "We've got very little time. For the people who have fled Ukraine, we must create sufficient capacity as quickly as possible to house them in a humane manner, provide them with housing and participate in their integration, just as our housing companies did in an exemplary manner during the wave of refugees in 2015."
Germany's Building Code allows for the emergency construction of refugee accomodation, and this needs to be leveraged along with other accelerated measures, to "get the green light for facilitation in all phases of housing construction. The real estate industry and local municipalities must pull together on this."
The impact of Putin's war and the associated sanctions are already making themselves felt in the construction industry, according to the Fachgemeinschaft Bau, a building association representing the interests of small and medium-sized construction companies. A shortage of bitumen, which depends on supplies of mainly Russian oil imports for its manufacture, and which is used in road construction, has pushed the price of asphalt up by more than 10% since the start of the war.
Structural steel is also soaring in price, with Germany dependent for 30% of its steel for construction on suppliers from Russia, Ukraine and Belarus. Pipes and aluminium products have already jumped in price, while construction costs generally are being pushed up by more expensive electrical, petrol and diesel input costs.
Berlin is facing the brunt of the refugee inflow into Germany at the moment, with the city's main train station effectively serving as a giant reception area and clearing house for the 10,000 refugees arriving daily. Efforts are being made to disperse many refugees as quickly as possible to states and regions that do not suffer as much from acute housing shortages, such as North Rhine-Westphalia and Mecklenburg-Vorpommern.
In some less tight housing markets, many large property companies have already announced new initiatives to house refugees, such as Peach Property, LEG Immobilien, Vonovia, along with local housing associations such as the Verband norddeutscher Wohnungsunternehmen, while portals such as Wunderflats.de and ImmoScout24 are also weighing in with marketing drives to find volunteers to help house refugees.