No More Spacious Pads: Thuringia Sees a Whopping 19.7% Drop in Apartments for Rent in 2024
Rapidly Completed Residential Units in Thuringia Reduced by One-Fifth and Are Now Habitable - Fewer than one-fifth of properties in Thuringia are prepared for residents to move in.
Hey there! It's time to chat about some shocking figures in Thuringia. Bummer, eh? But hold up, let's break it down.
Last year, the number of available apartments in Thuringia took a nosedive. The Statistical Office in Erfurt reported that just 3,310 apartments were completed in 2024, a whopping 813 fewer than the year prior. That's a drop of 19.7%!
Most of these apartments were new constructions. Through renovations and extensions of existing buildings, a mere 683 apartments were created (compared to 587 in 2023).
Surprisingly, the trend towards homeownership also took a hit in Thuringia. In 2024, around 1,000 new single-family homes were completed, marking a significant decrease of 355 compared to the previous year.
Of the newly built apartments, five out of every six were constructed under the auspices of private builders. Companies were responsible for 25%, while public builders, like municipalities and governments, accounted for a measly 0.8%. In 2023, public builders were responsible for 9% of the apartments completed.
So, what's behind this apartment crisis in Thuringia?
The drop in available apartments is primarily due to a few economic factors that have affected construction and the real estate market. Rising interest rates, together with broader market uncertainty, have put a damper on construction activity and diminished private demand for new residential units. Naturally, higher borrowing costs translate to reduced investment in building new apartments and slower completion rates for ongoing projects, eventually leading to a reduced number of units on the market.
Additionally, the instability stemming from economic and policy uncertainties has likely caused delays or suspended construction projects, affecting the supply of new apartments, much like the situation in Thuringia.
Although there's no direct evidence linking Thuringia's apartment availability decrease to specific causes in the results, it's possible to draw parallels with general trends in construction and private demand. For instance, construction firms in Germany and related markets have reported declining private demand and slowed residential construction due to high interest rates and economic volatility.[2] These factors decrease the pace at which new apartments become ready for rent, contributing to the depletion of housing inventory in regions like Thuringia.
In brief, the almost 20% drop in ready-to-move-in apartments in Thuringia in 2024 is primarily linked to the suppressing effects of high interest rates and economic uncertainty on residential construction and project completion within the region. Keep this in mind if you're on the hunt for a new pad in Thuringia! Good luck out there!
- The economic factors affecting construction and the real estate market, such as rising interest rates and broader market uncertainty, have led to a reduction in investment in building new apartments, causing a 19.7% drop in apartment availability in Thuringia in 2024.
- Policies related to financing, such as higher interest rates, have played a significant role in halting investments in real estate, which could potentially affect the housing market and job market, given that employment policies might be influenced by housing demand and supply trends, making it challenging to find employment in the construction or real estate sector.
