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Micro-apartments: the German response to the crisis of residential real estate

In recent years, alternative residential areas have been developed in Germany. There is a logical explanation for this: there is a clear lack of interesting options in the market for profitable real estate, and demand, as you know, creates supply.

Olga Müller About the author: Olga Müller, graduate economist, member of the Royal Academy of Real Estate Professionals RICS, associate professor of the European Academy of Real Estate Appraisers ESA, independent real estate appraiser PersCert TÜV and EN ISO / IES 17024, managing partner of IIG Real Estate GmbH and MSI R.E.S. GmbH.

German cities are growing rapidly and attracting more and more people, especially young students and recent university graduates. This leads to the fact that there are not enough housing facilities, and renting becomes more expensive.

In addition, in past years, market researchers have noted that construction activity in cities of category A has declined.

It is in megacities that another trend is noticeable: loneliness. According to the Federal Statistical Office, about 41% of Germans live alone. This is partly due to the fact that the population of Germany is aging: 34% of these statistics are elderly (64 years old and older).
Life in a compact format
Micro-apartments – residential areas ranging from 20 to 35 km – have become one of the trends in big cities. At the same time, this topic is not new, because the rooms in student dormitories prove that even at 18 square meters. m can fit everything you need for life. In Germany, mini-apartments are getting bigger in Berlin and Hamburg.

This type of profitable property attracts many investors. The demand among tenants for such facilities in cities of category A is huge. At the same time, the cost of rent per square meter may exceed the average price, since a small area plays a crucial role in the total cost.

Depending on the size of the mini-apartments can be purchased for € 100-150 thousand and rented for € 20-30 per square. m. According to Spiegel TV, micro-apartments are popular with qualified professionals who come to Germany to work for several months. In this case, most of the rent takes on the employer. An example of renting such an apartment is € 55 per night or € 1.8 thousand per month for 30 sq. M. m

As a rule, tenants change every few years – finish school, find a new job, get married. When there is a change of tenants and a new contract is concluded, the property owner can raise the rental price. It is likely that the most often will be offered apartments with furniture to circumvent the law on limiting the growth of rent (Mietpreisbremse): the landlord has the right to request a surcharge.

Compact apartments are built not only in megacities. For example, in cities of category D – Fulda, Ingolstadt – there are already whole complexes consisting of micro-apartments.

Whether this trend will dominate the real estate market is difficult to predict. For permanent residence such a small area may be insufficient for many. In addition, the German Institute of Economics (IW) warns that due to demographic changes, the number of students in the coming decades will decrease significantly.

Take your home with you
Germans are very mobile and often move within the country for reasons related to work, career and personal life. Accordingly, they are not in a hurry to acquire real estate in one locality. Then alternative options come to the rescue – for example, modular homes.

Modular houses (or “residential cubes”) are called residential objects of the future. A modular house is a construction assembled from special modules, the so-called sections, which have their own individual purpose – a kitchen, a bathroom, a living room. Each of the parts is autonomous in itself, but together they form a single structure that is great for housing and is no different from traditional houses.

The main advantages of such structures are compactness, mobility, speed of construction and low price. Modular homes are built from high-quality materials, they are strong and durable, the design itself implies many options for improvement and modification.

One of the advantages is weight. One module weighs about 2.5–3 tons; therefore, a conventional crane is sufficient for installation of the building, and the cost of transporting the structure is minimal.

Modular homes are suitable for comfortable living due to the presence of all the necessary amenities. Their concept allows you to add multi-unit modules in stages – both vertically and horizontally. At the same time, modular objects are suitable for construction on various land plots: this can be either a separate house or an apartment complex.

Another plus is the price. Modular homes are cheaper than one-room apartment. Such objects can be purchased at a cost of € 18 thousand. Examples – € 30 thousand for a “residential cube” with an area of ​​20 square meters. m turnkey or € 130-135 thousand for 60 square meters. Architectural companies estimate construction and equipment costs at € 1.47 thousand per sq. m. m

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