"Currently, residential construction in Germany is among the most expensive in international comparison¹." – this is once again emphasized in this year's Spring Real Estate Industry Report 2025 by the “Immobilienweisen Expert Panel”. Panel member Ralph Henger from the German Economic Institute (Institut der deutschen Wirtschaft, IW) analyses the "Residential Real Estate" sector and provides recommendations to political decision-makers and the industry on how to resolve the "conflicts of objectives between energy-efficient modernisation and affordable housing." 

His forecast, like that of many experts, also shows that the high demand for housing, the resulting shortage of available housing and high rents will not change in the near future. Additionally, the construction industry continues to struggle with a tight order situation due to high costs.

A key aspect of Ralph Henger's recommendations is therefore the need to reduce construction costs: 

• Standardised construction methods such as modular construction would help to reduce both construction costs and construction times while increasing productivity in the industry.

• Strict regulations have driven up building costs—simplifying construction requirements, for example, in noise and sound insulation, would help reduce costs.

• Parking space regulations represent a significant cost factor and should be revised.

• A “harmonisation of state building regulations” could further advance serial and modular construction, enabling cost savings.

Further policy and economic measures include: 

• Accelerating planning and approval procedures

• Structural reforms for a coordinated tax and subsidy policy 

• Reducing ancillary purchase costs, particularly the real estate transfer tax 

• Combination of property and subject promotion 

• Optimise rent regulation 

Since 2002, the “Immobilienweisen Expert Panel” has been issuing an annual Spring Real Estate Industry Report to increase transparency in the real estate markets. The report is published by ZIA, the German Property Federation, the leading association of the real estate industry.

To the Spring Real Estate Industry Report

¹ Property services and investment company CBRE, 2023: