Hamburg’s Housing Market: A Glimmer of Hope Amidst Ongoing Challenges
After years of difficulty, real estate and housing companies in Northern Germany are beginning to notice positive signs. According to the BFW Landesverband Nord, the downturn in residential construction appears to be easing. The association, representing around 230 members who manage approximately 180,000 homes in Northern Germany, reports that over 60% of new construction volume in Hamburg is attributable to its members.
New Housing Completions Rise, But Remain Low
In the past year, member companies in Hamburg completed 2,058 apartments – a 6.8% increase compared to 2024. Even as this is a positive development, Kay Brahmst, Chairman of the BFW Landesverband Nord, emphasizes that the overall level remains very low. “What we actually need to get the housing market moving again would be at least double that amount,” he stated. For context, in 2018, these companies completed a total of 5,632 apartments in Hamburg.
Construction Starts Show Modest Improvement
There has been a slight uptick in construction starts as well. In 2025, 644 apartments were started in Hamburg, a 16.5% increase. However, this figure is still significantly lower than previous years, such as 2022, when 5,219 construction projects began.
Planned Construction Offers Cautious Optimism
The most encouraging news comes from planned construction starts. Member companies intend to begin building 2,291 apartments in 2026 – a 127% increase compared to the previous year. While acknowledging that a significant portion of these projects may not come to fruition, Brahmst believes the upward trend is a positive signal.
Limited Relief for Renters in the Near Term
Despite the improving numbers, Claus Kießling, a board member of the association, offered little hope for renters in Hamburg. “There will be no turning point for tenants in the next one or two years. That’s the bitter message.” He explained that it will take at least until 2028 for the new housing supply to reach the market, with some projects taking even longer.
Regional Variations: Schleswig-Holstein and Mecklenburg-Vorpommern
The situation varies across Northern Germany. In Schleswig-Holstein, the number of completed apartments decreased by 8.5% to 1,496. Brahmst attributes this to funding mechanisms in the region, citing frequent closures of funding programs that lead to project delays. New construction starts also declined, falling by 37.5% to 877 apartments, again linked to funding issues.
Mecklenburg-Vorpommern experienced a more significant decline, with only 29 completed apartments – a 50% decrease compared to the previous year. However, Brahmst noted that these figures are not particularly meaningful due to the association’s limited membership in that region.
Simplifying Regulations and Incentivizing Homeownership
Brahmst stressed the need to simplify regulations for housing construction. He also advocated for incentives to encourage homeownership, such as waiving or reducing property transfer tax for first-time homebuyers.
Heating Law and Erbpacht: Ongoing Concerns
The recently debated heating law is considered largely irrelevant for new construction, as developers are already opting for renewable heating solutions like district heating and heat pumps. However, the Erbpacht (leasehold) model continues to face resistance from housing companies. We see not proving popular in the ownership sector, as potential buyers are hesitant to purchase properties on land that may revert to the city after the lease expires. No private investors have responded to offers of city-owned land under the Erbpacht model.
FAQ
Q: When will the housing situation in Hamburg improve for renters?
A: Experts predict limited improvement for renters in the next one to two years, with significant new supply not expected until at least 2028.
Q: What is the biggest obstacle to increasing housing supply?
A: Low levels of new construction completions and starts, coupled with complex regulations and funding challenges.
Q: What is Erbpacht and why is it controversial?
A: Erbpacht is a leasehold model where buyers purchase the building but lease the land. It’s controversial because of concerns about long-term ownership and potential land reversion.
Q: Are there regional differences in the housing market in Northern Germany?
A: Yes, Schleswig-Holstein and Mecklenburg-Vorpommern are experiencing different trends, with Schleswig-Holstein seeing a decline in completed apartments and Mecklenburg-Vorpommern facing challenges due to limited data.
Did you know? Despite a recent increase, the number of apartments completed in Hamburg in 2025 is still less than half of what was built in 2018.
Pro Tip: If you’re looking to rent in Hamburg, be prepared for a competitive market and consider exploring options outside the city center.
Stay informed about the latest developments in the Hamburg housing market. Explore current rental listings on ImmoScout24 and find more options on Immobilien.de.
Keep reading