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The need for housing in Central Germany is increasing despite the population decline!
Saxony-Anhalt: Challenges caused by demographic change and housing needs until 2045 - findings and forecasts.
The need for housing in Central Germany is increasing despite the population decline!
There is a clear trend in Germany: the real estate markets are in a state of upheaval, and this has far-reaching consequences for buyers, tenants and investors. In Eastern Germany in particular, the general conditions are changing rapidly. Development is subject to various dynamic influences that cannot be ignored in both urban and rural regions. The current analysis by MDR highlights that investors are faced with new challenges when purchasing single-family homes in rural areas.
The young generation in East Germany is growing up in an environment characterized by a stable labor market situation. Many people under 35 have not yet had any contact with unemployment and are expected to feel little of it in the future. Nevertheless, the current forecast demographic developments cast a shadow on this rose: According to the BBSR, the population in many regions of central Germany will decline drastically by 2045, in extreme cases by almost a quarter.
Construction needs in metropolitan areas
Despite this bleak development, there is a significant need for new housing. The cities of Leipzig and Dresden in particular are under pressure when it comes to housing construction. Leipzig will need around 1,600 new apartments annually by 2030, while a further 460 units are required in the Leipzig district. In Dresden, 1,100 new apartments are to be built every year, and in northern Saxony there is also a need for 410 apartments per year. Erfurt cannot sit back either, with an annual need for 400 new apartments.
How is real estate demand in rural areas? The picture is different. Although there is a risk of a decline in property values in rural, structurally weak areas, the demand for new types of housing is changing. This is particularly evident in demographic change, which will lead to an increase in the proportion of people over 65 to around 28 percent by 2030. As miamakler reports, this will also affect property prices in rural regions and could lead to a decline of up to 20 percent.
Urbanization continues
The urban centers, on the other hand, experience a different dynamic. More and more people are moving there, which ultimately drives up real estate prices. An increase in values is forecast in metropolitan regions such as Berlin, Munich and Frankfurt. Accordingly, the demand for suitable housing and living spaces in these cities will continue to be high. Haufe highlights that cities like Leipzig could grow by up to 30.2 percent, while other regions have to struggle with increasing vacancies and property declines.
Overall, it is clear that the changes in the real estate market due to demographic change and the different developments in urban and rural regions require intensive action. Investors and buyers should pay close attention to the specific conditions of the respective regions and adapt their strategies accordingly in order to continue to benefit from the opportunities on the real estate market in the future.