As rents in larger German cities reach record highs, a new study has found that more than half a million apartments in less sought-after areas are standing empty - and the situation is expected to worsen in the coming years.

Number of vacant properties in Germany will increase

As anyone who has travelled beyond Germany’s major and university cities knows, in many municipalities, there are thousands of apartments that have remained unoccupied for years. As renting in cities like Berlin and Munich becomes more and more competitive, there are plenty of areas with an oversupply of cheap real estate where less and less people are looking.

This much is clear from a new study of vacancy rates conducted by Emprica and the real estate consultancy CBRE, who have evaluated data from the Federal Statistical Office (Destatis) to compile a vacancy index of Germany. For the index, they only looked at apartments (not private homes) that can be rented directly, and did not consider unusable units. 

The data shows that around 2,8 percent or more than 600.000 apartments in Germany are currently empty. While that’s around 50.000 fewer than five years ago, the situation in some regions - including Dessau-Roßlau, Suhl, Gera and Wilhelmshaven - has actually worsened. The study’s authors expect that the number of vacant properties in Germany will actually increase until 2022, “especially in the rural migratory regions.”

West Germany more desirable than East Germany

As you might expect, the index shows significant differences between East and West. 6,1 percent of apartments in East Germany (excluding Berlin) are currently empty, compared to 2,2 percent in West Germany.

The highest vacancy rate in the country is in Pirmasens, where 9,1 percent of apartments are unoccupied. The next highest rates are Schwerin, Chemnitz, Frankfurt an der Oder and Salzgitter. 

Unsurprisingly, Munich is at the bottom of the index with a vacancy rate of just 0,2 percent. Frankfurt am Main, Freiburg, Münster and Darmstadt follow closely behind. In contrast, in areas where the population is shrinking, every twelfth dwelling remains unused.

Shrinking regions build too much; growing cities not enough

Reiner Braun, Member of Emprica’s Executive Board, attributes this difference not just to population growth in big cities, but also to the fact that, “despite existing vacancies, upmarket properties are still being built in shrinking regions.” In many cities, therefore, there are far more new apartments than necessary.

The solution to the problem, according to Braun, is to make shrinking regions attractive again. He suggests investing in cities, to increase the number of authorities or universities and to make the city centres more visually appealing. 

He also recommends revamping empty apartments in worthwhile areas rather than favouring greenfield development.