Wednesday, 21 October 2026
Germany’s residential property sector is facing renewed uncertainty as Berlin continues to consider proposals that could bring large privately owned housing portfolios under public control. International credit insurer Atradius has warned that the debate could influence investment decisions and lending conditions at a time when residential construction remains under pressure. The discussion comes against a background of weak housing completions, elevated development costs and lengthy approval procedures, raising questions about how Germany can address rental affordability while encouraging the delivery of additional homes.
The debate originates from Berlin’s September 2021 referendum, when a majority of participating voters supported an initiative seeking public ownership of substantial residential portfolios held by major private landlords. The proposal concerned approximately 240,000 apartments and was intended to increase public influence over rental housing in the capital. However, the referendum was not legally binding, and implementing such a measure would require further political decisions and an appropriate legal framework. Questions concerning compensation, financing and constitutional requirements remain central to the discussion.
Supporters of the initiative argue that transferring existing apartments into public ownership could strengthen tenant protections, improve long-term affordability and reduce the influence of large corporate landlords over rental conditions. Atradius approaches the issue from a different perspective, focusing on the possible consequences for investment and construction financing. David Engelhardt, Manager Risk Services at Atradius, argues that transferring existing housing portfolios between owners would not directly increase the number of apartments available to households. The insurer believes that measures encouraging new residential development are necessary to address Germany’s underlying housing shortage.
The discussion takes place during a difficult period for Germany’s construction industry. According to figures cited by Atradius, approximately 206,600 homes were completed nationwide in 2025, representing the lowest annual total since 2012. Around 238,000 residential building permits were issued during the same year, illustrating the difference between projects receiving approval and those reaching completion. The number of completed homes also remained substantially below the previous federal government’s ambition of delivering 400,000 new apartments annually, a target that Germany has repeatedly failed to achieve.
Looking ahead, Atradius estimates that residential completions could decline to approximately 185,000 units in 2026, which would represent a reduction of around 10.5% compared with the previous year. However, forecasts for the sector differ. Germany’s construction industry association had previously anticipated between 210,000 and 220,000 completions during 2026, indicating a less severe contraction than the one projected by Atradius. The variation highlights the uncertainty surrounding construction schedules, financing conditions and the number of projects expected to reach completion before the end of the year.
The volume of approved housing that has not yet been completed remains substantial. Atradius reports that approximately 760,700 apartments had received planning permission but were still unfinished at the end of 2025. This figure includes developments at different stages of construction and should not be interpreted as the number of abandoned projects. Nevertheless, the large difference between approvals and completed homes illustrates the challenges involved in converting development plans into finished residential accommodation. According to Atradius, the average period between obtaining permission and completing a housing project has increased by approximately seven months since 2020, reaching around 27 months.
The reasons for Germany’s construction difficulties extend beyond the debate over property ownership. Higher building costs, more expensive financing, shortages of qualified workers and complex administrative requirements have all affected residential development. Developers must also account for technical standards, infrastructure requirements and the time needed to obtain approvals. Atradius considers improvements in planning procedures and greater predictability in the regulatory environment important for encouraging investment and reducing the financial risks associated with lengthy construction projects.
The insurer believes that uncertainty surrounding the possible transfer of privately owned housing portfolios could add another consideration for investors and lenders assessing residential property opportunities. Long-term development decisions depend partly on expectations about future ownership rights, rental income and the regulatory conditions under which properties will operate. Atradius warns that uncertainty in these areas could discourage some financial commitments or make funding more difficult to obtain. However, the company has not demonstrated that Berlin’s ownership proposals have already caused a measurable reduction in residential construction or investment, and the broader slowdown predates the latest debate.
Financial pressures are also affecting businesses throughout the construction supply chain. Atradius reports increased attention to payment risks involving developers, contractors, specialist construction firms and suppliers of building materials. The insurer has observed a rise in the financial value of claims associated with construction-sector insolvencies, suggesting that financial difficulties are affecting companies with larger outstanding obligations. Demand for financial guarantees and insurance arrangements that help construction businesses manage contractual requirements and preserve liquidity also remains significant.
Germany’s comparatively low rate of homeownership adds another dimension to the housing discussion. A large proportion of households rely on rented accommodation, making the availability, cost and management of rental properties important economic and social considerations. Public ownership could potentially influence how existing apartments are managed and how rental policies are implemented, depending on the eventual legal arrangements. However, changes in ownership would not automatically expand the housing stock. Increasing the number of available homes would still require new construction, redevelopment or the conversion of suitable existing properties.
The financial implications of any large-scale transfer would also depend on how properties were valued and how compensation to existing owners would be funded. These questions could influence the resources available for other housing measures, including construction programmes and infrastructure investment. At present, the Berlin proposals remain part of an ongoing political and legal debate rather than an implemented transfer of residential portfolios. The eventual consequences for investors, tenants and public finances cannot be established without a defined legislative framework and financing arrangements.
For Germany’s residential property market, the immediate challenge remains the limited number of new homes being delivered. Atradius argues that more predictable investment conditions and simpler development procedures could help improve construction activity, while supporters of public ownership continue to emphasise the affordability and management of existing rental accommodation. The two approaches address different aspects of the housing problem, and neither automatically resolves the other. As residential completions remain weak and financing conditions continue to influence development decisions, the interaction between housing policy, private investment and construction capacity will remain important for Germany’s property sector.
