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Germany’s housing market faces a glaring contradiction: while the country is gripped by a severe housing shortage, approximately two million apartments stand vacant. This paradox, revealed by recent census data, has prompted policymakers to devise strategies to address the issue. However, industry experts warn that these plans may fall short of tackling the structural problems behind the vacancy rates.
The figures are stark. As of 2022, Germany's vacancy rate stood at 4.5%, with 1.9 million homes unoccupied. Eastern Germany, excluding Berlin, accounts for 535,919 of these, representing a vacancy rate of 7.6%. In some areas, such as northern Bavaria and the Vulkaneifel, the proportion of empty properties climbs to 20%. Meanwhile, Berlin and other urban centres have just 2% vacancy rates, reflecting intense demand and rising rents.
Federal Minister for Construction Klara Geywitz has highlighted the geographic disparities in vacancy rates. Rural and structurally weak regions bear the brunt, with population decline following industrial and economic upheaval. For instance, the once-thriving porcelain manufacturing region of Wunsiedel in northern Bavaria lost 25,000 residents and 15,000 jobs after the 1990s. District Administrator Peter Berek’s efforts to revitalise the area—through campaigns like "Space for Doers"—underscore the challenges of reversing decades of depopulation.
Geywitz’s strategy aims to make these regions more attractive by improving public transport, digital infrastructure, and educational opportunities. Yet critics argue that these efforts alone are insufficient. Axel Gedaschko, president of the German Association for Housing, Urban and Spatial Development (GdW), has described the government’s plans as “disappointing,” calling for more robust demolition funding and support for housing companies burdened with old debts, especially in eastern Germany.
Limited government proposals
The federal strategy includes several initiatives, such as the “Young People Buy Old” programme, which provides low-interest loans to families purchasing older homes. Another proposal, “From Old to Two,” aims to convert oversized detached houses into multi-unit properties by adding kitchens, bathrooms, and separate entrances. Additionally, the “Commercial to Residential” initiative seeks to repurpose vacant commercial spaces and schools into rental housing.
While these measures have potential, critics highlight their limited scope. The Berlin-Brandenburg Housing Association (BBU) emphasises that vacancy rates exceeding 15% in some areas cannot be resolved through renovation alone. Maren Kern, chair of the BBU, insists that demolition remains critical in regions with long-term depopulation.
The federal government’s demolition funding is a particular sore point. Currently, subsidies amount to €110 per square metre of living space, split between federal and state governments. Housing associations argue this figure must rise to €140 to reflect rising costs. Without adequate funding, efforts to eliminate unsustainable housing stocks will stall.
Social housing companies sidelined
Beyond funding, the housing industry has urged the government to engage more closely with local stakeholders. Gedaschko stresses that social housing companies, which grapple daily with the realities of high vacancy rates, are best positioned to recommend practical solutions. Their participation, however, has been largely overlooked in federal planning.
Meanwhile, Geywitz is banking on a new online platform, “Potential Vacancy,” to consolidate funding information and best practices. Launched earlier last week, it is intended as a resource for municipalities and housing companies looking to combat vacancy. Yet industry leaders remain sceptical, pointing to the need for legislative reforms and long-term funding commitments to address the systemic issues at play.
Germany’s vacant housing crisis underscores broader regional disparities that mirror the nation’s economic divide. Urban centres like Berlin and Munich struggle with soaring rents and housing shortages, while rural areas languish with empty properties. Without addressing these structural imbalances, the federal government risks exacerbating both extremes.
As Gedaschko aptly summarised, “Revitalising vacant properties saves land and costs, but only a comprehensive, well-funded approach can deliver meaningful results.” Whether the incoming government will heed such advice remains to be seen. In the meantime, Germany’s housing paradox persists—a glaring reminder of the complexities inherent in balancing urban demand with rural decline.