The low point: 2025 and 2012 in direct comparison

The figure of 206,600 only becomes tangible in historical context. For comparison: in 2020 — the most recent peak — 306,376 dwellings were still completed in Germany. In just five years, construction output has thus collapsed by around 100,000 units per year. In 2012, at the low point after the financial crisis, there were 200,500 dwellings — the current figure has returned to that level.

Building permit statistics show even more clearly what lies ahead in the coming years: only 215,300 dwellings were approved in 2024 — a decline of 16.8 percent. Since an average of 26 to 27 months pass between approval and completion (2020: still 20 months), completions in 2026 and 2027 are already foreseeably low. The construction backlog — dwellings already approved but not yet built — amounts to 759,700 units, of which only 330,000 are actually under construction.

The 400,000 target: promised, never achieved

The traffic-light coalition had set the target of 400,000 new dwellings per year, including 100,000 social housing units, in its 2021 coalition agreement. Chancellor Scholz stuck to the target even under growing pressure. The result: the target was not even approximately achieved in a single year.

In 2024, completions reached 63 percent of the target — in 2025 just 52 percent. Construction Minister Klara Geywitz became the face of the construction crisis, and as early as 2023 Tagesspiegel called the 400,000 promise a “castle in the air”. Historically, an average of 405,000 dwellings per year have been built in the Federal Republic since 1950 — the current level is thus far below the long-term average.

Why is new construction collapsing? The five main causes

The interest rate turnaround

The ECB raised its key interest rate from 0 percent (2021) to over 4 percent (2023). Mortgage rates jumped from around 1 percent to 4 to 5 percent. For project developers with variable-rate debt capital and thin margins, this meant the end of many calculations.

Exploding construction costs

The energy crisis, inflation and supply bottlenecks since 2021 drove up material and labour costs sharply. Concrete, steel, timber — all significantly more expensive than at the offer-planning stage. Many projects approved in 2020 were no longer economically viable in 2023.

Wave of insolvencies

Real estate insolvencies rose by 70 percent in 2024. In the first quarter of 2024 alone, 630 real estate and construction companies went bankrupt — an increase of 18.6 percent compared to the same quarter of the previous year. The consequence: 320,000 jobs were at risk or disappeared.

Bureaucracy and approval procedures

Changing energy standards (Efficiency House 55 standard), the lack of a federal building code and cumbersome approval procedures structurally slow down construction projects. The average time from approval to completion has increased from 20 to 27 months since 2020.

Collapse in demand for owner-occupied flats

The interest rate turnaround reduced purchasing power. Project developers were left sitting on completed dwellings that couldn’t be sold — and cancelled their next projects.

Regional extremes: Berlin, Cologne, Munich

The IW Köln institute estimates an annual housing need of 372,600 units nationwide — only 206,600 were actually built in 2025. The annual gap thus stands at over 165,000 dwellings.

Regionally, extreme imbalances are evident:

Berlin: largest supply gap nationwide

Need according to IW Köln: 31,300 dwellings per year. Building permits in 2024: only 9,772 — that’s 31 percent of demand. No other urban district has a bigger absolute gap.

Cologne and Munich

Cologne has the worst coverage ratio among the metropolises: only 37 percent of demand is met. Munich fares best at 93 percent, yet thousands of units are still missing. Hamburg is the only positive exception, with +39 percent completions in 2024.

Eastern Germany: decline twice as severe

The decline hits the East with –34.3 percent (2025), more than twice as severe as Western Germany (–16.7 percent).

What the construction crisis means for rents and purchase prices

The housing gap has long since arrived in the market. Listed heritage properties in particular are gaining attractiveness in this environment. The Pestel Institute puts Germany’s housing shortage at 1.4 million units — a record level. By 2030, 2.4 million new dwellings will be needed.

Rents are reacting accordingly: nationwide, asking rents for new lettings rose by 7 percent in 2024, in Berlin by 10 percent — a total of 22.2 percent between 2022 and 2024. Munich stands at €20.50 cold rent per square metre (+4.4 percent). The DIW Berlin institute notes that the real estate market remains tight — rents and housing prices continue to rise.

For investors, this means: rental yields in German metropolitan areas are rising structurally — not because purchase prices are falling, but because supply is not catching up in the foreseeable future. Anyone investing now in existing properties or new builds in growth regions benefits from a market where the supply problem will not be solved before 2027 at the earliest. Anyone planning a purchase now should factor in the structural supply deficit as a long-term tailwind.

Video: housing market in turmoil

Outlook: when will the market turn around?

The signals are mixed. The Central Association of the German Construction Industry (ZDB) expects 215,000 to 220,000 completions in 2026 — hardly better than 2025. Positive completion figures are not expected before 2027 at the earliest.

A silver lining: building permits rose again in 2025 for the first time, by 10.6 percent to 238,100 — in September even by 59.8 percent compared to the same month of the previous year. Since permits precede completions by two to three years, this points to a moderate recovery from 2027 onwards.

Structurally, the problem remains: the IW Köln institute forecasts increasing market tension in major cities, even though nationwide demand is calculated to decline slightly from 2026. In metropolises such as Berlin, Munich and Hamburg, the gap persists — and is growing.

In five years, Germany has wiped out all the construction progress made since the financial crisis. The 400,000-dwelling gap will not be closed by political promises, but only once interest rates, construction costs and approval processes structurally return to a level that lets project developers make their calculations work. Exactly when that will happen remains open.

A million euros in the bank – what a feeling! But this sudden increase in wealth also comes with responsibility. Whether through hard work, an inheritance or a lottery win, the most important question is: what to do with the money? Without a clear strategy, a large sum can melt away quickly. Many people tend towards impulsive spending or ill-considered investments. Learn here how to invest 1 million euros safely and profitably, to benefit from your wealth in the long term. Back to overview: Inheritance.

1 million euros – what you should do first

The first step with a large sum is to stay calm. Emotional decisions often lead to mistakes that can be avoided. Take the time to get an overview of the situation and develop a structured approach. Experts recommend parking the money safely at first and seeking professional advice before investing it.

What should you do?

• Park the money safely.
• Do long-term planning.
• Seek professional advice.

Tip: An overnight deposit account offers short-term security and protects against impulsive spending.

Why not spend it all?

It’s tempting to spend large sums quickly. But studies show that many people who suddenly become rich lose their wealth within a few years. The main reasons are ill-considered purchases, lack of investment expertise and rising fixed costs from an elevated standard of living. A well-thought-out plan is essential to secure and grow your wealth in the long term.

Example: An acquaintance immediately bought himself a sports car. After a few months he had to sell it at a loss because the running costs exceeded his budget.

The best strategy: 70% real estate, 30% capital markets

With a million euros you can pursue a balanced investment strategy that combines security and growth. The 70:30 rule has proven itself: 70% in real estate for stability and 30% in liquid investments for flexibility and returns. This combination allows you to stay flexible in the short term while profiting in the long term.

Investing 70% in real estate

Real estate provides a solid foundation for wealth preservation. It is inflation-proof and offers long-term appreciation. With €700,000 you can invest in multi-family houses or condominiums that generate stable rental income and offer tax advantages.

Advantages of real estate:

• Stable appreciation in good locations.
• Protection against inflation through rising rents.
• Tax-free profits after ten years.

Example: With €100,000 in equity and a bank loan of €400,000, you can acquire a property worth €500,000. The rental income covers the loan costs.

More information can be found here: Should you invest a lottery win in real estate?

30% in ETFs and other capital investments

You should invest the remaining €300,000 flexibly to diversify your portfolio. ETFs, shares and commodities like gold are ideal forms of investment, offering both security and return potential. ETFs allow you to invest broadly in international markets, while high-dividend shares generate additional income. Some also use currency trading.

Suitable forms of investment:

• ETFs for broad diversification and solid returns.
• Shares with stable dividends and growth potential.
• Gold as inflation protection and crisis hedge.

Tip: Choose ETFs such as the MSCI World or S&P 500 for broad market coverage.

Comparison: real estate vs. overnight deposits

How does real estate compare to overnight deposits? Real estate offers higher returns in the long term and, through the leverage effect, enables significantly stronger wealth accumulation. Overnight deposits offer short-term security but cannot keep up with the returns and appreciation of real estate.

Simplified example – leverage means you contribute €1 million in equity (20%) and your bank finances 80%, a full €4 million. That brings you to a total investment sum of €5 million. If you have a track record, perhaps even already own real estate, your equity share will reduce significantly. With full financing you only pay the purchase-related costs, and with 110% financing you don’t even have to invest a single euro of your own.

Invest instead of squander

Whether your wealth arose from an inheritance or a lottery win: 1 million euros requires a smart strategy. With the 70:30 rule, you combine secure real estate investments with flexible capital investments. Real estate offers stability and regular income, while ETFs and shares enable growth and diversification. With professional advice and a long-term perspective, you secure your wealth and maximise its potential.

More tips and information can be found here:

• Inherited money? Step-by-step guide
• Should you invest a lottery win in real estate?

Frequently asked questions about investing 1 million euros

How much interest does 1 million euros earn?

At a safe interest rate of 3.5 percent (overnight deposits, government bonds), that’s €35,000 a year — before capital gains tax. With a mixed strategy (real estate + ETFs + bonds), €50,000 to €70,000 p.a. is realistic. Crucial: avoid concentration risk and secure liquidity.

How much real estate should you hold with a million euros?

Classic recommendation: 30 to 40 percent in real estate (€300,000–400,000), the rest in liquid investments. This corresponds to a high-quality condominium as a capital investment in a German A-city, combined with an ETF portfolio and an overnight deposit reserve.

Should you invest 1 million euros all at once?

No — cost averaging over 12 to 24 months significantly reduces timing risk for ETFs. For real estate, market entry is possible year-round. Important: keep 3 to 6 months’ salary as a cash reserve. Independent financial advice (fee-based advisor) is strongly recommended at this amount.

Explainer video: 3 advantages in 4 minutes

Tip! Don’t miss anything, subscribe now on YouTube: Lukinski!

Advantage 1: protection against inflation

Inflation can quickly devalue your savings. For example, if you have €100,000 and inflation is at 5%, you lose 5% of your money every year. After two years, your €100,000 is worth only €90,500. Real estate offers effective protection against inflation, because rents usually rise with inflation. If inflation is at 5%, your rental income also rises by 5%. This means you benefit from rising rental income in the long term, and your investment is protected against the effects of inflation.

• Assets: €100,000
• Inflation 5%, purchasing power after 1 year: €95,000
• Inflation 5%, purchasing power after 2 years: €90,500
• …

Bonus tip! The effect of inflation on loans and repayment

Suppose you’ve taken out a loan of €100,000. In times of inflation, your money gradually loses value. This means your money’s purchasing power decreases while prices for goods and services rise.

Here’s the interesting part: while prices rise and incomes increase, your loan’s monthly repayment rate stays unchanged. This means that over time you keep repaying the same fixed instalment, which decreases in real purchasing power.

This has two important effects:

Your debt gets “devalued”

Inflation causes your debt to decrease in real terms. This means the originally borrowed loan amount of €100,000 is worth less in real purchasing power over time. In other words, you effectively repay less once you factor in inflation.

Rising income can make repayment easier

If your income rises over time due to inflation, it becomes easier to manage your monthly repayment instalment. This means you may have more financial leeway to make other investments or reach your financial goals faster.

Advantage 2: your tenant pays off your investment

One of the best features of real estate investments is that your tenants pay off your investment. The bank grants you a mortgage loan that you don’t have to earn yourself. Your tenant pays the monthly rent, which covers part of the financing. Once the financing is paid off, the property belongs to you entirely. On top of that, you benefit from the appreciation of the land. Even if land prices rise by only 5% per year, these gains add up over the years to a substantial sum of additional wealth.

• You only need 20% equity
• The bank provides the rest (debt capital)
• Who pays your loan? Your tenants!

Remember this sentence forever:

Your tenant pays off your investment!

Advantage 3: passive income

As soon as your monthly rental income covers your monthly costs, you generate passive income. This means you earn extra money every month without having to work actively. This passive income can help you achieve financial independence and give you the freedom to enjoy more of your life. For example, if you have monthly costs of €1,000 and monthly rental income of €1,100, you generate a monthly passive income of €100.

• “Costs” of your property p.a. = €12,000
• Net cold rent p.a. = €13,200
• Surplus = €1,200

Why does a property make sense as a capital investment?

Hopefully you no longer ask yourself this question after these 3 key advantages!

Real estate investments offer effective protection against inflation, the opportunity to build wealth while your tenant pays off the investment, and the chance of passive income. If you enjoyed this video, don’t forget to like it and subscribe to my new channel. Stay tuned for more insightful content on real estate investing. Thank you for watching!

Tip: Capital investment guide

Where to invest? A, B or C locations

Where to invest? The 3 location types quickly explained:

1. Properties in A-locations promise high profits on sale, but rental income often doesn’t cover the costs Primary goal: profit on sale
2. Properties in B-locations offer positive cash flow and are ideal for beginners, with positive economic development and good infrastructure Primary goal: positive cash flow
3. Properties in C-locations carry risks with poor prospects, low income and high crime, which can lead to falling prices and vacancies Primary goal: low purchase price, high yields

Explainer video: Real estate location at a glance

My walking route through Inglewood

From Phil’s Barbecue to the Mega Donut through Inglewood.

A-location: high profit on sale, but…

In my video I explain what it means to invest in an A-location. These locations, such as in Munich, Berlin or Hamburg, often promise high profits on sale thanks to the constant increase in land prices. However, rental income here can’t always cover the costs (yield), which means you pay extra every month. This is called investment property in an A-location.

• A-location stands for prestigious locations in cities like Munich, Berlin and Hamburg
• High profits on sale beckon here, as land prices rise continuously
• However, rental income often can’t cover the high costs, which can burden investors on a monthly basis
• Investment properties in A-locations are known for long-term appreciation, but require patience and capital

B-location: positive cash flow and ideal for beginners

The B-location is a different story. Here, rental income is often sufficient to cover the costs (repayment, interest, maintenance reserve) and even generate positive cash flow. These locations offer positive economic development, a growing population and good infrastructure. B-locations are often found in the commuter belt around A-locations or in individual major cities and are an ideal investment, especially for beginners.

• B-location refers to locations in the commuter belt of A-locations or in up-and-coming major cities
• Here rental income is often sufficient to cover costs and achieve a positive cash flow
• These locations offer positive economic development, growing population figures and good infrastructure
• B-locations are ideal for beginners looking for stable investment opportunities

Invest in A-location or B-location?

• A-location = profit only on sale (annual net cold rent < cost of the property)
• B-location = direct positive cash flow (annual net cold rent > cost of the property)

C-location: don’t underestimate the risk

Then there’s the C-location, and here you really need to be careful. These are districts or cities such as Duisburg Marxloh, where prospects are poor, income is low and crime is high. Nobody wants to buy here, and prices are often cheap. However, there’s a risk that land prices will stagnate or even fall, offering no protection against inflation. Add to that the local clientele, vacancies and possibly rent nomads.

• C-locations are risky locations with unfavourable prospects, low income and high crime
• Investors might find cheap purchase prices, but there’s a risk that land prices will stagnate or fall, with no protection against inflation
• Vacancies and possible rent nomads are typical of C-locations, and potential tenants may be hesitant
• These locations require comprehensive risk analysis and can be challenging for inexperienced investors

More details in the video!

If you want to know exactly how to assess the location of a property and decide where and when to invest, check out my new video. I give you all the important information and advice you need to make smart decisions in real estate investment.

Don’t forget to subscribe to my real estate YouTube channel so you don’t miss any updates. The world of real estate investment is diverse, and I’m happy to help you understand it better!

Lukinski YouTube: yield, investment property & co.

Discover with me the key factors, metrics and fundamentals of real estate investment. Compared to other forms of investment, real estate offers a ‘safer’ way to invest capital with consistent returns and long-term appreciation. Want to invest your money wisely? My recommendation: real estate, passive income and a good life.

• Lukinski YouTube

Why influencer marketing?

CM by Lukinski

Influencer marketing is today one of the most effective ways to reach target audiences directly. With creative strategies and data analysis, influencers help convey brand messages authentically and personally. Whether for lifestyle products, fashion or even high-end real estate — influencers build trust and bring reach.

This is exactly where CM Creator comes in: with tailor-made campaigns that set trends instead of following them. So if you feel like diving into the world of influencer marketing, CM Creator offers the perfect opportunity.

Job opening: Influencer Marketing Specialist (full-time)

In this role you develop and manage influencer campaigns for well-known clients. From selecting the right creators to performance analysis, you’re involved in every step. Your workplace is our office in Cologne, where a young, creative team is waiting for you.

• Develop creative strategies
• Plan and implement campaigns
• Collaborate with influencers
• Analyse data and optimise results

Sounds exciting? Then apply now and get started!

• Apply: Influencer Marketing

Internship in influencer marketing – career starter

Want to gain your first experience in influencer marketing? As an intern, you’ll support our team in planning and implementing campaigns. In doing so, you’ll learn everything you need for a career in this field.

• Support in developing strategy
• Research and outreach to influencers
• Organising and evaluating campaigns
• First insights into data analysis

An internship at CM Creator lays the foundation for your career in digital marketing.

• Apply: Influencer Marketing

What connects us

Whether at CM Creator or here at Lukinski — the key to success lies in the combination of creativity and strategy. While at Lukinski we focus on real estate marketing, CM Creator shows how these principles translate to influencer marketing. Both worlds benefit from innovation, precision and a focus on genuine connections.

Apply now

Whether a full-time position or an internship — at CM Creator you can expect a creative environment where you can grow. Apply today and become part of a team that is redefining influencer marketing.

We look forward to your application!

What does an influencer agency do?

You can find our influencer agency and more cases here: CM Creator Cases!

Outdoor and event campaigns:

Indoor campaigns:

Fashion! All the way to virtual influencers:

Platforms like Model Agency One bring brands and creators together for high-impact campaigns.