section_path: Causes/Housing and infrastructure
section_name: Housing and infrastructure
paragraph_text: Housing and infrastructure
  
  Germany's decentralized economic structure, with economic strength spread across several municipalities such as Berlin, Cologne, Hamburg, Munich, and Frankfurt, presented a challenge for real estate investors according to economists. Economists stated that unlike countries with a dominant economic hub, Germany lacked a standout city that typically attracts concentrated foreign investment, preventing growth in housing demand and in construction sectors. This was coupled with refinancing difficulties and declining property values, which were felt across Europe. Many firms in the real estate sector found themselves unable to service their debt, limiting their capacity for new investments and ongoing projects.
  
  Several bosses of German construction companies reported that despite there being a pertinent housing shortage in several German cities such as Berlin, that building new homes was "practically impossible" due to approval taking long amounts of time, costly noise and heating regulations, and governmental ignorance of how to solve issues in housing shortages and aid construction work.
  
  Germany's unique position as a nation primarily consisting of renters exacerbated the housing crisis. In 2024, Germany was the only European Union country with more renters than homeowners, with over half the population not owning their homes. This situation was partly attributed to past political decisions, including the sale of thousands of government-owned apartments to private investors and a drastic reduction in social housing construction by local governments. The International Monetary Fund reported that Germany's public investment had been near the bottom among advanced economies, with budgeted funds often underspent due to staff shortages in municipalities, resulting in hindered productivity.