BERLIN, July 22 (Xinhua) -- In Germany's seven largest cities, on average only 71 percent of the apartments needed to meet rising demand were completed between 2016 and 2018, according to a study published by the German Economic Institute (IW) on Monday.
In order to meet the growing demand for housing in German cities by 2020, around 341,700 apartments would have to be built each year nationwide, of which 62,800 would need to be built in the seven largest cities, said the study.
"Not only are there currently no apartments here, but there is also a need for a further increase in construction activity in the longer term," said Ralph Henger and Michael Voigtlaender, authors of the study.
The city of Berlin required around 21,000 new apartments to be built each year by 2030. Currently, however, the city was not even building 17,000 new apartments a year.
The German government is aiming to build around 375,000 residential units per year for the period 2018 to 2021.
However, the study noted that "the construction of over 300,000 apartments appears unlikely" given the German construction industry's high workload, a shortage of skilled workers as well as lengthy bureaucratic processes for new residential buildings.
"We cannot keep up with building, we cannot build enough housing in urban areas and centers," said Henger, senior economist for housing policy and real estate economics at the IW.
Outside the big cities, the situation is different. In many rural German districts, the number of apartments built in the past two years was twice what was actually needed.
The authors of the study emphasized the importance of "conversion before new construction" in order to avoid oversupply in rural districts.
Since the end of 2015, prices for residential real estate have risen by 22 percent across Germany, according to the Federal Statistical Office (Destatis).
During the last four years, above-average price dynamics for condominiums were recorded in major cities, where prices rose by almost 41 percent, recent Destatis figures showed.
The IW study said the amount of housing built in Germany's big cities had a direct influence on the rent prices and Henger believed the "construction of homes is the best means against rising rents."
