Gap between supply and demand unchanged
While these efforts have
helped to keep the gap between supply and demand unchanged, they have not
narrowed it. There are numerous reasons for the low supply price elasticity in
Frankfurt. Above all, there is a shortage of construction plots. The city already
stretches to its borders. Moreover, large-scale construction projects take time
and are the subject of controversial discussions, just as in other cities. Limited
construction activity has led to a significant shortage of residential units, defined
as the number of households in relation to the number of available residential
units.
According to the city’s latest official figures, the deficit amounted to
c. 40,000 residential units in 2015, i.e. More than 10,000 more than in 2014. In
2016 and 2017, the gap probably widened, to c. 50,000 residential units. And it
will take far into the coming decade to reduce the demand overhang. In line with
this market situation, prices for existing apartments and terraced houses rose
68% and 60%, respectively, between 2009 and 2017.
EU Forecast
euf:ba.18.j:160/nws-01