| Study Period | 2019 - 2030 |
| Base Year For Estimation | 2024 |
| Forecast Data Period | 2025 - 2030 |
| Historical Data Period | 2019 - 2023 |
| CAGR | 5.50% |
| Market Concentration | Low |
Major Players*Disclaimer: Major Players sorted in no particular order |
Germany Residential Construction Market Analysis
The Germany Residential Construction Market is expected to register a CAGR of 5.5% during the forecast period.
The Germany Residential Construction market is driven by the huge number of immigrants residing in the country demanding new homes. Furthermore, the market is driven by government initiatives to provide affordable housing and fulfill the housing demand increasing in the country.
The government has significantly increased affordable housing subsidies. To ensure that the new affordable housing goals are met, the government has established a new ministry to oversee the sector's development. Based on current migration trends, Germany is expected to require at least 400,000 new housing units per year for the next decade or more. It is anticipated that the new government's increased emphasis on affordable housing and the need for new housing units due to increased migration will continue to support the country's industrial growth in the short to medium term. As a result, positive outlook can be expected for the German residential construction sector over the next four to eight quarters.
While the German housing market has been remarkably strong for decades, it faces a significant price decline in the coming years. In December 2024, contractors in Germany expressed the most pessimism compared to their counterparts in major EU nations. Highlighting persistent challenges, Q3 2024 saw a continued decline in building permits for new residential projects. Since early 2022, the issuance of these permits has halved.
According to the Cologne Institute for Economic Research, approximately 5 million people in Germany earn a living from renting, and the country has the second-lowest share of homeowners among all OECD countries, according to the Bundesbank. Because fixed-rate mortgages account for more than 80% of mortgages in Germany, many households have locked in the very favourable financing conditions that existed until very recently for five to ten years. Housing scarcity, rising rental prices, and a strong labour market will continue to support the market, even if house prices fall, it wouldn't necessarily be a bad thing.
Germany Residential Construction Market Trends
Apartments & Condominiums Drive the Germany Residential Construction Market
In Berlin, a demographic shift and an increase in single-person and small households are driving up demand for small apartments, particularly those measuring up to 50 sqm. Yet, despite this rising demand, the availability of such residential listings has seen a significant decline over the past decade. In H1 2024, over two-thirds of small apartments in Berlin were listed as furnished. This surge in furnished listings for small apartments likely stems from a lack of rent regulation and a heightened demand for short-term, temporary rentals.
In 2023, developers completed 9,837 apartments in Munich, marking a robust 31% uptick from the prior year. When compared to the other Big 8 cities, Munich leads the pack, boasting around 62 completed apartments for every 10,000 residents.
In 2023, Hamburg's housing construction hit a nadir, culminating in the completion of just 5,999 apartments. This marked a steep 35% drop from the prior year, the most pronounced decline when juxtaposed with other cities. On a per capita basis, Hamburg lagged behind, with only 31 apartments completed for every 10,000 residents.
In Frankfurt, developers completed 3,661 apartments in 2023, marking a 24% rise from the prior year and slightly surpassing the decade-long average. Yet, in Frankfurt, a hesitance among project developers towards new residential constructions is dampening the number of building permits, casting uncertainty on future completion rates.
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Increasing Investment in Residential Real Estate Drive the Market
The green transition is one trend that will have an impact on the German real estate market in the future. The German government is strongly encouraging energy-efficient housing because the building sector accounts for 16% of total greenhouse gas emissions in Germany. Recent plans to reduce reliance on Russian oil and gas could hasten the green transition in housing.
Starting January 1, 2024, new heating systems in Germany must utilize a minimum of 65% renewable energy, as mandated by the country's Building Energy Act (GEG). Additionally, the act sets a target to completely eliminate fossil fuels from heating systems by the year 2045.
According to Savills, the situation in the German residential market is currently highly ambiguous. Changes in financial conditions have caused significant reluctance among investors in the investment market. In contrast, supply in the rental apartment markets has become even tighter, which has improved long-term income prospects for investors. Savills anticipates that the tug-of-war between increased apartment scarcity on the one hand and rising interest rates on the other will continue in the coming months. This will create numerous opportunities for investors in the coming months.
Germany has Europe's strongest economy and clear urbanization trends, making it especially receptive to NREP's expertise in improving city-built environments. It is capable of developing more customer-focused products and implementing ESG initiatives more broadly, which has proven to be a successful strategy when expanding into new Northern European territories. NREP has formed a long-term joint venture with Artisa Group, a major Swiss real estate developer operating across European markets, for its first German investment. The joint venture intends to deliver 5,000 co-living apartments by 2025, with the first investment consisting of the purchase of two co-living assets totalling 314 individual apartments. One of the assets located near Berlin's new business district Mediaspree has been DNGB Gold certified post completion in 2024.
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Germany Residential Construction Industry Overview
The Germany Residential Construction Market has become increasingly competitive and fragmented with a large number of local and regional players and a few global players.
Increased infrastructure spending, new government initiatives to drive investment, and new project announcements are expected to drive overall growth in the real estate sector, which may pique the interest of more investors.
Some of the major players in Germany include Arup, BAUER Spezialtiefbau GmbH, GOLDBECK GmbH, KAEFER Construction, Max Bogl, and many others.
Germany Residential Construction Market Leaders
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Arup
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BAUER Spezialtiefbau GmbH
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GOLDBECK GmbH
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KAEFER Construction
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Max Bogl
- *Disclaimer: Major Players sorted in no particular order
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Germany Residential Construction Market News
- January 2023: MPC Capital, an asset and investment manager, has acquired a new construction project in Nauen, Berlin, for its "ESG Core Residential Real Estate Germany" fund. The project is being built to the KfW-40 EE standard and meets extensive ESG criteria, which are required for the fund to invest. The development consists of seven multi-family buildings totalling 106 residential units and 127 parking spaces. The rentable living space is approximately 8,600 m2. The project was completed by the end of 2024.
- July 2024: abrdn, a global investment firm, has bolstered its foothold in the continental European residential rental market by acquiring an asset in Cologne, Germany.
Germany Residential Construction Industry Segmentation
Residential construction includes construction on single-family or two-family dwellings that are occupied or used or are intended to be occupied or used, primarily for residential purposes.
A complete background analysis of the Germany Residential Construction Market, including the assessment of the economy and contribution of sectors in the economy, market overview, market size estimation for key segments, and emerging trends in the market segments, market dynamics, and geographical trends, and COVID-19 impact, is covered in the report.
The Germany Residential Construction Market is segmented by type (apartments & condominiums, and landed houses & villas), by construction type (new construction and renovation). The report offers market size in value terms in USD for all the above segments.
| By Type | Apartments & Condominiums |
| Villas | |
| Other Types | |
| By Construction Type | New Construction |
| Renovation |
By Type
| Apartments & Condominiums |
| Villas |
| Other Types |
By Construction Type
| New Construction |
| Renovation |
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Germany Residential Construction Market Research Faqs
What is the current Germany Residential Construction Market size?
The Germany Residential Construction Market is projected to register a CAGR of 5.5% during the forecast period (2025-2030)
Who are the key players in Germany Residential Construction Market?
Arup, BAUER Spezialtiefbau GmbH, GOLDBECK GmbH, KAEFER Construction and Max Bogl are the major companies operating in the Germany Residential Construction Market.
What years does this Germany Residential Construction Market cover?
The report covers the Germany Residential Construction Market historical market size for years: 2019, 2020, 2021, 2022, 2023 and 2024. The report also forecasts the Germany Residential Construction Market size for years: 2025, 2026, 2027, 2028, 2029 and 2030.
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Germany Residential Construction Industry Report
Statistics for the 2025 Germany Residential Construction market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Germany Residential Construction analysis includes a market forecast outlook for 2025 to 2030 and historical overview. Get a sample of this industry analysis as a free report PDF download.
