Housing shortage in Lörrach: Successful housing construction despite major challenges!

Housing shortage in Lörrach: Successful housing construction despite major challenges!

The housing market situation in Lörrach remains tense and has political explosive power, as the Black Forest messenger reported. The need for living space cannot be met in the coming years, which makes the situation particularly precarious. More new housing construction would be urgently needed, but implementation is proving difficult.

The number of registered prospective tenants in Lörrach has currently fallen to 2,679, while 678 households in Schopfheim are looking for new apartments. These declines are due to technical issues during a software transition that resulted in some data not being transferred. Interestingly, most prospective tenants already live in the region; only about 11% come from outside the district. One- and two-person households are particularly in demand, accounting for around 65% of demand. The demand for one-bedroom apartments, on the other hand, has fallen, while interest in two-bedroom apartments is increasing.

Development of rental prices

The target rents for Wohnbau Lörrach rose by around 1.11 million euros in 2024, which is primarily due to new buildings and rent increases. The average monthly rent is now 7.55 euros per square meter. Over the past decade, rents have risen an impressive 23.8%, while consumer prices rose 26.9% in the same period, according to data from Real estate scout24 clarify. Around 94% of the apartments in Lörrach are suitable for recipients of basic security or citizen's benefit, with around 61% of the apartments having a price per square meter of less than 7.50 euros and 63% costing less than 550 euros.

Another problem is the increased rent losses that occurred in 2024, due, among other things, to unrented parking spaces and vacancies during tenant changes. Despite high demand, there were no massive vacancies; However, major renovation measures led to additional loss of rent. What is interesting is that tenant turnover has reached a record low of 5.8%, compared to a comparable figure of 11.1% in 2010.

Outlook on the housing market

A comprehensive study by DZ HYP entitled “Residential Real Estate Market 2024 | 2025” highlights the current challenges and opportunities in the German residential real estate market. The analysis covers seven large German cities and twelve regional centers and shows that demand is increasing and the number of new buildings appears to be stagnating. While rental price developments are accelerating, stable investment opportunities appear to be emerging for investors. According to DZ HYP CEO Sabine Barthauer, the price correction has been completed and the first interest rate cuts by the European Central Bank (ECB) could provide planning security.

There are around 4 billion square meters of living space in Germany, but the number of households is growing faster than the population - a trend that could remain a challenge in the coming years. According to forecasts, rental prices are expected to increase by around 5 percent in 2024 and 2025. In view of the lower completions and high manufacturing costs of residential buildings, which have increased by 40 percent since 2020, the pressure on the housing market in Lörrach and beyond will probably continue.