(de-news.net) – Researchers at the German Institute for Economic Research (DIW) argue that Germany’s current housing scarcity exists alongside historically high per-capita living space because residential construction over decades has systematically favored ever-larger dwellings, even as household sizes gradually declined. Long-term data indicate that living space per person has more than doubled since the mid-20th century, rising from approximately 18 square meters in the 1950s to more than 49 square meters in the present day, according to metropolitan census data and postwar housing statistics that track both new construction and occupancy patterns. By the turn of the millennium, the relative abundance of one- to three-room apartments, which had historically been the norm, had markedly diminished, reflecting a broader pattern of expansion in both unit size and household amenities. The average floor area of newly built dwellings began to show a measurable decline only in the early 2000s, and projections suggest that by the middle of the 21st century, the average size of new homes will decrease from approximately 94 square meters in 2024 to around 88.5 square meters, representing a gradual but significant shift in residential planning norms.
Comparable patterns have been documented across several other developed nations, although variations in housing markets and cultural preferences are evident. For instance, countries such as Norway and Belgium historically favored larger single-family homes, whereas high-density urban developments in Japan resulted in a preponderance of smaller units. In many of these countries, the trend toward expanding dwelling sizes reached a peak before gradually reversing, albeit at different historical moments: some experienced this transition prior to the year 2000, while others saw it emerge only in the aftermath of the global financial crisis. Housing analysts attribute this gradual move toward smaller units to three principal structural forces that shape contemporary residential construction and market behavior.
The first force is demographic: households have become smaller due to population changes, particularly in urban centers where single-person households now predominate. This demographic shift has produced a structural mismatch within the existing housing stock, as most homes still contain four or more rooms, despite the fact that the majority of households consist of only one or two individuals.
The second factor concerns economic constraints: the financial capacity of households to purchase or rent larger dwellings has been increasingly constrained by sharply rising real estate prices and rental costs since approximately 2010. In response, developers have increasingly favored the construction of smaller, more compact units, which can yield higher returns per square meter and mitigate financial risk. These price dynamics have also incentivized the construction of multifamily residential buildings, which allow the costs of expensive urban land to be distributed over a greater number of units. Consequently, while the average size of apartments within these multifamily structures has declined, both the proportion of new homes located in such buildings and the number of units per building have risen substantially.
The third structural driver is regulatory: municipal land-use policies in numerous German cities have limited the construction of single-family homes, citing goals of environmental sustainability and spatial efficiency. These regulations, by constraining the horizontal expansion of residential neighborhoods, have further reinforced the shift toward denser, smaller dwellings. The combined influence of demographic trends, economic pressures, and planning restrictions has thus created a housing market in which smaller, more efficiently designed units have become increasingly prevalent, even as the overall availability of living space per person remains historically high.
In response to the ongoing housing shortfall, analysts argue that strategies such as the adaptive reuse of existing buildings, coupled with a rebalancing of the housing stock toward smaller units, are as critical as expanding new development. Modest reductions in per-capita living space could also contribute to broader climate and energy-efficiency objectives, given that residential floor area represents a primary determinant of energy consumption. However, given the slow rate of turnover within the housing stock, meaningful reductions in average living area are likely to occur only gradually: projections indicate that by 2050, the average per-capita living space may decline by approximately six square meters, or roughly six percent relative to current levels, reflecting both the inertia of the existing built environment and the measured pace of structural adaptation in residential planning.
