Real estate prices are falling: Why home ownership remains out of reach in Saxony!

Real estate prices are falling: Why home ownership remains out of reach in Saxony!

Real estate prices in Saxony, Saxony-Anhalt and Thuringia have fallen in recent years, but fortunately home ownership remains an unattainable dream for many. Martin Schatz, CEO of the Middle East Real Estate Association, reports that surveys show how great many Germans want to have their own living space. However, the reality is different: more and more people can no longer afford to buy a property while rents are climbing. This issue has become even more acute due to declining supply, with politics being targeted as the culprit for the reduced construction activity. A look at the numbers speaks volumes: In Saxony-Anhalt, for example, vacancies are high, with around 113,000 of 1.26 million apartments.

Rising rents and falling construction activity mean that many landlords can continue to do good business. According to forecasts by the Federal Institute for Building, Urban and Spatial Research (BBSR), population growth in Saxony will be concentrated primarily in Leipzig and Dresden by 2045, while numerous districts in Saxony-Anhalt and Thuringia will have to reckon with considerable population losses. Regions such as the Erzgebirgskreis with a decline of minus 70,200 and Zwickau with minus 60,900 inhabitants are particularly affected.

Construction activity and new building needs

Despite this challenging situation, the need for new buildings remains unbroken, especially in the growing cities of Leipzig and Dresden. An annual demand of 1,600 apartments in Leipzig and 1,100 in Dresden is forecast by 2030. It turns out that the demand for apartments is determined not least by the number of households - smaller household sizes are increasing in particular. This means that 5,100 new buildings are on the list every year in Saxony, 2,000 in Thuringia and 1,400 in Saxony-Anhalt.

But where does all this lead? As the use of real estate changes, the market reflects not only supply but also demand. According to the platform Immobilienscout24, rental prices in Saxony have risen in recent years and currently average almost €19/m². This development is based on a shortage of supply, which is exacerbated by the decline in new building permits and completions. A circumstance that puts even more strain on many people in the region.

Market situation 2025 and outlook

We will continue to face challenges in the German real estate market in 2025. The Property Post describes that the economic weakness and the increase in construction costs are shaping the market. In this context, an increasing vacancy rate for office space in less sought-after locations is predicted, while the demand for modern, environmentally friendly office properties is increasing.

For the residents of Saxony, Saxony-Anhalt and Thuringia, the search for affordable living space and the dream of owning their own home often remains difficult. The desire for living space is palpable, but reality presents high hurdles. There is a great need for action and it remains to be seen how the markets will develop in the future. While some regions are flourishing, others are struggling with migration and vacancies - it remains exciting.