alt Hacker NewsThis is one thing that I don't understand, take for example Germany, the population barely grew over the last 20 years [1], at the same time there has been a building boom that building costs have risen dramatically (more than doubled between 2010 and 2024). Compare that to the 60s and 70s where population was rising much faster in combination with the rebuilding effort. So is the growth of housing stock lower than the population growth? If yes how come that this was not the case when population growth was significantly faster (even 30 years ago). I don't recall there being more building going on when I was young than now, in fact if anything my impression is it's the other way around.
[1] https://www.worldometers.info/world-population/germany-popul...
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I suspect part of it is that the housing being built now is both bigger and better than that built in the 60s and 70s. Think of what cars were like then versus now. The other might be the availability of land. Another factor is how housing has changed from being more of a commodity item back then (its a place to live) to an investment vehicle (its a thing you own and make return from). These trends are not specific to Germany, but would apply to many developed countries worldwide.
Excellent question, what happened is there are less people in a household than there used to be and households consume more m2 per household member. In reply to your second point, percentagewise there has been less building, in absolute terms there is more because of population growth since the 60s. This translates to ‘seeing more building projects’.
https://www.umweltbundesamt.de/daten/private-haushalte-konsu...
> So is the growth of housing stock lower than the population growth?
National averages can hide a lot of local issues. I'm in Berlin right now, I'm told by locals that it's lost the reputation it used to have for "cheap" housing. (It's not cheap, but I'll have to take their word for it that it ever was, I've not found historical purchase prices vs. income graphs like I've seen in the UK).
Meanwhile, if you're willing to look at 115 year old places in the arse end of nowhere: https://www.immobilienscout24.de/expose/165084645?referrer=H... or https://www.immobilienscout24.de/expose/164269182?referrer=H...
New places are more expensive for various reasons. The land in Berlin can easily be as expensive as the cost of building a home on that land, because fixed supply and a lot of demand. Even if the land was free, the cheapest new build cost I've seen is more than twice the price of the more expensive of those two, but will almost certainly also make up for the full price difference (including land at Berlin prices) just in reduced energy bills before the mortgage is paid off.
IMHO the key problems is new building is not targeted to the affordable market and easier to build areas with access to jobs of good economic income are not really open any longer. The established land markets are more expensive because literal "green field" expansion of new cities is not very common, and no longer available in quantity. The cost to build are further increased because the higher end market demands more amenities and developers almost always target the highest market available.
Note: I have a personal theory that one way China was able to perform at this it's current stage of growth, was because it was expanding a lot of first generation real estate development to new areas. It will be very interesting to see if they are able to maintain low housing costs going forward into the next couple decades.
There are dubious claims that the lower end market will be served by aged-out high end market housing and that's simply not the case. It ignores that housing stock ages out of usability - and remodeling is often more expensive to work on than the initial builds. Once you remodel them, they occupied at the high end, then they never free up or go down in rent for other portions of the market.
Not German so I can only talk about how it is going in another country:
- Massive change in the average household size: way fewer people live together now (delayed couple & family formation, divorce, etc.). If you go from 4 people per household to 2 people per household, now you need twice as many homes.
- Massive internal migration: declining population in a lot of rural areas and increasing in cities & their suburbs. So lot of empty houses and super cheap houses in Dumbfuck, Nowhere but scarce & expensive homes where people want to live.
This apparent conundrum breaks away if you consider who holds the wealth now vs. in the 60s. In the 60s-70s, there was a wealth tax in Germany. Shortly after WW2, a law was drafted to redistribute wealth: All individuals and companies whose assets remained largely intact were required to pay 50% of their net wealth (as assessed on the day of the 1948 currency reform).
This means that the working class had immense wealth and so simple jobs could support a family on a single income, buy a house, etc.
Compare that to today — the two richest families in Germany hold more wealth than the bottom 50% COMBINED.
It is no wonder that normal families cannot afford to buy property anymore; and are forced to rent. This further exacerbates the wealth gap.
Another nice statistic is the productivity VS wage VS pensions curve: https://substackcdn.com/image/fetch/$s_!KDug!,f_auto,q_auto:...
(Black line - GDP, blue line - avg comp; red line - avg pension)
In short - the productivity increased; but ordinary people are being squeezed out of the gains regardless. No wonder that everyone turns sour at some point.