Germany's new‑home construction falls short amid rising costs and regional mismatch

A new analysis by Jones Lang LaSalle (JLL) finds that around 50,000 apartments are built each year in German regions where demand is flat or falling, while major cities experience a severe shortfall. In the eight largest cities only about 42 new units per 10,000 existing homes are completed, but 62 are needed. Over 70 % of new residential buildings are single‑family homes, a pattern that creates an additional demand of roughly 16,300 units annually.

The GdW housing‑industry association projects that only 200,000 dwellings will be finished in 2026, far below the estimated need of 320,000. Construction costs have risen 51 % since 2019 and financing costs have quadrupled since 2021, making many projects financially unviable. In Thuringia, new‑building prices rose 5.5 % year‑on‑year, driven by higher material, labour, energy and transport costs.

A separate study of real‑estate broker density shows that small German cities such as Baden‑Baden have the highest number of agents per 100,000 residents, while the largest metros—Berlin and Munich—rank near the bottom. The findings highlight the uneven distribution of both housing supply and market services across the country.