Housing shortages and rising rents impact Austria and Germany

Housing markets in Austria and Germany are facing significant challenges due to declining construction and high demand. In Austria, Statistik Austria reports that housing construction has reached a low point. In 2025, only 48,597 apartments were completed, a 12.3 percent decrease from 2024. Specifically, completions in newly constructed buildings fell by approximately 20 percent, the lowest level since 2011. Experts warn that because building permits have also been declining since 2021, the shortage is likely to persist.

In Germany, the student housing crisis is acute, with over 100,000 students on waiting lists for state-funded accommodation. In cities like Munich, applicants must apply at least a year in advance. The price gap between subsidized dormitories and the private market remains vast, with private apartments in major university cities costing significantly more than the average dormitory rate.

Political and economic debates regarding rent control continue. In Berlin, Die Linke party leader Ines Schwerdtner stated that even after the socialization of large housing companies, rents could still rise by up to two percent annually to cover maintenance costs. Meanwhile, a Spanish study cited in German media suggests that immigration accounted for approximately 41 percent of inflation-adjusted rent increases in Spain between 2018 and 2025.