Among Germany’s seven biggest cities, Hamburg stands out as the metropolis with the fastest housing development, relatively speaking. This is the gist of a comparison that the IW German Economic Institute in Cologne conducted. According to the survey, 58 flats were completed for every 10,000 residents in Hamburg in 2018, which is almost ten percent more than in Munich (53), the runner-up, and over twenty percent more than in third-highest ranked city of Frankfurt am Main (47).

Berlin trails closely behind with 46 completed flats for every 10,000 residents. Following far behind are Cologne (36), Düsseldorf (32) and Stuttgart with just 30 flats per 10,000 residents. This compares to a nationwide average of 35 flats (source: spiegel.de).  

Successful Alliance for Housing

That housing construction is progressing at a faster rate in Hamburg than in other German metropolises is no coincidence but the result of a housing policy that actively seek to promote the development of new housing. Hamburg’s city hall entered into an alliance for housing development with the housing industry many years ago. When the alliance was relaunched in 2016, the municipal authorities and the business community agreed to raise the number of annual planning permissions for residential accommodation to 10,000 units annually.

As early as 2018, Hamburg cleared not only the target mark of 10,000 permits but actually exceeded that number in terms of housing completions. That year, 10,674 flats were completed in Hamburg, meaning 2,754 flats or roughly 35 percent more than the year before – and more than in any other year since 1977 (source: ndr.de). Dorothee Stapelfeldt (Social Democrats), the Senator for Urban Development, called it “a truly great outcome of the collaboration between Senate, boroughs and housing industry.”  

No Tailwind for Investors in Berlin

The collaboration of the stakeholders is probably one of the main reasons why Hamburg is Germany’s model student when it comes to housing construction. Investors in Berlin, by contrast, benefit from no such tailwind, as IW expert Michael Voigtländer pointed out. He added that, while the number of completed dwellings has tripled since 2008, the growth rate is qualified by the fact that the city started at a very low level but has experienced massive incoming migration.

Across Germany, the number of 346,800 planning permits issued in 2018 is matched by only 285,900 completed flats. Although construction activities have gone up nationwide in recent years, the pace of development lags well behind the building boom seen in the 1990s, for instance.