New expat arrivals in Germany hit by housing crisis

Germany in general and Munich and Berlin in particular are in an affordable property crisis, affecting citizens and expatriates alike.

Websites offering advice to newly-arrived expats are full of helpful hints as well as sad tales of those starting their new jobs during the day and trawling rental agencies at night before sleeping on friends’ couches. One told it like it is, saying the housing market in Germany is a nightmare. Advice includes getting together an impressive portfolio containing former landlords’ glowing references, CVs, credit histories and pay slips, simply to place yourself at the head of a very long queue.

At least a third of German cities now have severe housing shortages, especially acute in the favourite mega-cities of Berlin, Cologne and Munich. Almost two million new homes are needed, with Chancellor Merkel promising an additional 100,000 affordable apartments aimed at low wage earners at a cost to the state of five billion euros. Even top expat earners are affected, with one who’d relocated to Berlin from Cologne spending huge sums on AirBnB rentals during the week and returning home on weekends. His clean laundry was stored at his office, and other possessions were hidden in his car parked well outside the city.

One reason for the chronic shortage of rental accommodation is that the German housing market works differently than other property markets elsewhere in Europe. Half of residents rent rather than buying a home and house prices are soaring due to the rental crisis, leaving the government with no option but to relax building regulations in order to speed up construction. However, incoming expatriate professionals aren’t likely to benefit from such a scheme, as properties will be aimed at local workers on less than generous salaries, often with families to support. Other problems on the supply side include the high price of land and the long, slow processing of building applications.