Fuelled by significant population growth, a push for bigger and better housing, and complex bureaucratic red-tape stifling new development, the mismatch between supply and demand in key German residential real estate markets has continued to widen. Despite structural trends and the COVID-19 effect tightening the grip on housing, there remain attractive opportunities for established investors with local networks and intimate market knowledge to create value in cities such as Berlin, Stuttgart, Hamburg and Dresden.

Bolstered by an additional c.300,000 immigrants each year on average over the past 10 years, Germany’s enormous population growth over the past 20 years is set to continue. Germany is projected to have a 5 percent urbanisation rate and a 10 percent to 20 percent annual population increase until 2035. However, unlike France and the UK, this growth will be decentralised and take place beyond just one giant metropolis.

At the same time, the underpricing of Germ