Residential Market: Rise in Single-Person Households Drives up Demand
The number of single-person households is soaring at such a brisk rate that the total number of households is rising with it, even though the number of larger households is in decline. In 2012, the Federal Statistical Office counted just below 40.7 million households in Germany, whereas the number in 2005 still stood at 39.2 million. It comes as no surprise therefore that the demand for flats is surging. At the same time, the change in household size is also influencing the nature of the demand. The focus has shifted to smaller and mid-sized apartments. As a result, rent rates in this particular segment are growing fast because the housing supply will obviously not expand overnight. Moreover, new construction projects tend to plan for larger flats. Accordingly, the square-metre rent for smaller flats re-let in Berlin is already the highest today. The acquisition of such a flat as private investment is definitely a worthwhile commitment.
More Residential Floor Area per Capita
With the increasing number of single- and two-person households, on the one hand, and the growing expectations of people regarding their homes, on the other hand, the ratio of residential floor area per capita is going up, too. In 1998, the average floor area available to residents of Germany was 39 square metres. Since then, figure has risen to 45 square metres. And it is expected that the tendency toward larger floor areas per capita will keep rising in sync with the increasing number of single-person households. A look at Norway or Switzerland, where the ratios are already higher than in Germany, goes to show that continued growth is by all means possible.