Germany is currently experiencing a major housing shortage, impacting the ability to locate affordable housing within a reasonable timeframe. Several issues continue to plague the housing market, with the inability to complete new construction in a timely manner and the war in Ukraine being major factors. While the German government has recognized the housing supply deficit – especially in major cities like Berlin and Munich – construction material shortages, lack of skilled workers, increased construction costs, and interest rates have hindered their ability to complete new construction quickly. While the housing market was already experiencing high demand and low supply, the war in Ukraine placed further stress on the housing market. Germany quickly became the destination of choice for many refugees, having accepted over 915,000 to date into the country. The government is now predicting the need for an additional 300,000-500,000 housing units just to meet current need, leaving no end in sight to the current shortage.

 Destination Services Providers (DSPs) are also experiencing difficulty meeting the requests for services due to extended timeframes needed to locate available housing for showings and securing a property. In major cities like Berlin, there may be up to a thousand applicants wishing to view a single property. Combined with the current shortage of DSP consultants, we have seen a number of our DSP partners pivot and adapt their service delivery model. Being consultative, agile, and ready to support ad-hoc viewings means a typical one-day home search may now need to be spread out over a number of different days. As a result, we expect to see a continued impact on availability of services, scope of work, and pricing of moves.

 It is important that the correct expectations are set with both the DSP and mobile employees. In this type of severe housing shortage with no immediate solution available, the expectation should be set that:

  • Locating housing must be made a priority
  • Showings may take place over a span of time vs. within one day and may even be virtual
  • Quick decisions may be requested and needed due to the competitive nature of the market and multiple offers being received
  • It is critical to review “perception vs. reality” with the DSP and the mobile employee; setting the correct expectations of availability, timelines, and housing challenges will ensure a successful engagement

How can Aires combat these challenges? Aires has proactively sourced additional qualified DSP providers, specifically in high-demand areas (Berlin, Hamburg, & Munich). Additionally, we recommend and guide our clients to ensure that the employee has sufficient support to meet these challenges by:

  • Providing a minimum package of three (3) days of DSP services in order to offer some flexibility to work within the housing challenges
  • Making certain that sufficient temporary housing is provided (30 days) to allow the employee the time needed to secure housing

For additional information or further discussion, please contact your Aires representative.

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