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01/10/2016

Refugee influx tough on German housing market

Justice & Home Affairs

Refugee influx tough on German housing market

Germany faces some tough challenges ahead providing housing for its immigrant population.

[Salim Virji/Flickr]

The growing number of refugees is starting to affect the German housing market. According to a new study, Germany will need to build 400,000 new homes every year. EurActiv Germany reports.

In the coming years, Germany will need a total of two million new homes. That’s according to a study by Hannover’s Pestel Institute, which the federal housing association presented in Berlin on Tuesday (16 September).

Pestel has urged the government to reach the targets set out in the study. By 2020, 400,000 new homes will be needed every year. The main reason given for this increase was the “rising number of refugees”.

This year in Germany, an estimated 270,000 new homes will have been built. 110,000 of these will be for rent, said Matthias Günther from the Pestel Institute. For 2015, the sector had forecasted immigration totalling around one million people, but due to the influx of refugees, this figure is now invalid.

>>Read: Analysts: Refugees ‘may end up boosting European economies’

According to Günther, the deficit in the housing market has been exacerbated by immigration from other EU countries, and by heavy migration into the cities. Since 2009, a deficit of 770,000 homes has accumulated, according to the institute’s calculations.

The association has now called upon the German government and the regions to take action. The association has provided the ministry responsible for construction with a list of requirements, said the chief executive of the Federal Association of German Housing and Real Estate Companies, Ingeborg Esser.

Included in the list are political incentives such as investment subsidies for co-operative and communal housing companies, a higher capital allowance until 2020 and affordable land.

In addition, energy efficiency standards should not be increased for the time being, and for the beginning of 2016 will be subject to the tightening up of the EU’s energy-saving ordinances. This would not affect fire prevention or other safety standards, assured Robert Feiger, president of the construction trade union.

>>Read: Merkel at odds with her own party over refugees

The association has indicated that it would like to build 140,000 rental apartments per year itself.  According to the study, 80,000 new social housing units and 60,000 new homes for middle-income families cost the country around €9.6 million a year.

This would be offset by around €6.3 billion in tax revenue. Through this “social housing growth programme”, social insurance could take in around €950 million a year.