Don't Find Your Dream Pad so Easily in Thuringia! A Whopping 20% Drop in Apartments Ready for Move-In
Approximately half of the apartments in Thuringia have been completed and are now available for residents to move in. - Substantially fewer dwellings in Thuringia are prepared for habitation, amounting to about twenty percent fewer properties.
If you're on the hunt for a new place to call home in Thuringia, you might want to buckle up. The state saw a steep 20% decline in apartments made available for occupancy in 2024. That's a whooping 813 fewer apartments compared to the previous year, as per the Statistical Office in Erfurt.
The majority of these apartments were new constructions, with 683 units created through renovation or expansion of existing buildings (2023: 587 apartments).
The dream of owning a house in Thuringia fizzled out too, with a 26.2% decrease in new single-family homes in 2024. That's a loss of 355 homes from the previous year.
Of the newly built apartments, 54.6% were initiated by private builders, with companies accounting for 25% and public builders like municipalities and governments responsible for only 0.8%. In 2023, public builders accounted for a more significant 9% of the apartments completed.
So, what's going on?
- High Interest Rates and Economic Scaries: The high-interest rate environment in 2024 has made residential construction costlier. Slower financing has slowed down new housing developments, including apartments ready for occupancy in regions like Thuringia.
- Economic Volatility: Macroeconomic uncertainties caused by inflation and geopolitical tensions have led businesses and developers to proceed with caution, impacting the pace of completing new residential projects.
- Reduced Private Demand: Sluggish demand for new residential units from the private sector has contributed to fewer apartments being completed or made available in Thuringia.
- Inflation and Expensive Building Materials: Rising inflation has driven up the cost of construction materials and labor, further hampering the construction process and slowing down the availability of new apartments.
- Policy and Structural Factors: Germany's government initiatives emphasis on climate-neutral and resource-efficient construction regulations have added to construction delays and increased costs in the short term, potentially reducing the number of new apartments ready for move-in.
In short, a perfect storm of factors is responsible for the decline in apartments ready for occupation in Thuringia in 2024. High-interest rates, economic uncertainties, reduced private demand, inflation, expensive building materials, and government regulations conspired to stymie new apartment construction and availability. So, if you were hoping to find that perfect dream pad in Thuringia, you might have to search a bit harder this year!
The current employment policy, as well as community policy, might need to address the economic issues impacting the housing market in Thuringia. For instance, investing in low-interest finance schemes for construction companies could help stimulate the building of new apartments. Additionally, implementing housing-market policies that promote affordability, such as easing real-estate regulations, could encourage private investment and increase the availability of apartments for employment seekers.
