DIP partner Aengevelt Immobilien takes up decades of market knowledge and research results that prove that every newly built apartment – even in the luxury segment – helps to relieve tight housing markets. The real estate house thus refutes the professionally unjustified criticism of the so-called seepage effects, which is still spread in popular media and in the political sphere. Although the seepage effects vary depending on the type of completed dwelling, relief effects can be demonstrated to a large extent, which also benefit households with lower incomes in particular.
In the structurally strong cities, university towns and conurbations, it can be observed that the housing shortage that has been forming since 2008/2009 has been worsening almost continuously, because even from a purely quantitative point of view, building completions are no longer keeping pace with the increase in the number of private households. The chronically increasing shortage of housing supply is also easily reflected in the rise in rents, which has been well above the rise in the cost of living for almost two decades. At currently only around 250,000 residential units p.a., the new construction work carried out in recent years was far below the demand that Aengevelt estimates at 600,000 per year, including replacement and pent-up demand – a new construction performance that was last achieved in the 1990s.
From a socio-political point of view, groups that are particularly needy are lower-income households, families, senior citizens, people with disabilities and, in these target groups, households that do not yet have a suitable apartment because they first want to start a household or are “forced” to move to a city or region with insufficient housing due to training, studies, work or private reasons. The construction of publicly subsidized housing, sometimes aimed at special target groups, directly benefits lower-income groups. However, due to the high subsidy costs per housing unit, only around 62,000 social housing units could be completed per year, which is far below demand. The mass of lower-income households must therefore be supplied with comparatively low-cost existing apartments due to a lack of suitable supply.
If new residential construction can currently be presented at all in an economical way, then it is mainly in the segment of high-priced new apartments. Both in the area of owner-occupied residential property and privately financed rental apartments, new housing construction can be stimulated by significantly lower subsidy amounts than in the social housing sector. This is also justifiable from a socio-political point of view, because even a newly built luxury apartment benefits needy households by triggering relocation chains in the existing stock due to the move, i.e. causing a seepage effect.
However, the effectiveness of the seepage effects is repeatedly disputed. Even the renowned Immobilien Zeitung publishes a link on its website to an episode of the satirical show “Die Anstalt” from December 2025, which denies the seepage effects. The program quotes from a status report of the Scientific Services of the German Bundestag on the topic of “Seepage effect in the housing market”, which comes to a skeptical assessment of the seepage effects on tense housing markets. Aengevelt considers it misleading that the Scientific Services cite a pamphlet that “more than 200 scientists have signed”, especially since numerous signatories are apparently not identified in this regard.
Aengevelt has evaluated six empirical studies published between 1978 and 2020 that analyzed relocation chains triggered by over 270,000 new buildings in a good dozen cities, most of them in tense housing market regions. On average, 2.8 to 3.3 relocations were triggered by a new residential building, so that existing apartments at a lower price level actually became available. In addition, the above-mentioned research results were also confirmed by the in-depth study carried out by the Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR) across cities that up to 269 existing apartments became available for every 100 new apartments, depending on the type of apartment, as part of the relocation chains. Particularly long relocation chains were observed in the new construction of group housing projects, single-family houses and assisted living apartments. The construction of owner-occupied homes also means that families in particular benefit from the seepage effect.
It is often objected to seepage effects that relocation chains break when household founders or newcomers move into a vacant apartment. But in these cases, breaking the removal chain early means that the desired supply effect has already been achieved. For example, the construction of micro-apartments usually leads directly to the provision of housing to a needy student household that has received a place to study in another city or municipality. Micro-apartments also have a particularly high space efficiency.
The meta-study by the empirica Institute comes to the conclusion that all the seepage studies examined found that the majority of households moving were able to improve their living space and quality of life. The intended socio-political effects have also been achieved to a considerable extent, as empirica states: “In 50% of all cases, the seepage effect thus provides households with at most an average income and in at least 25% of all cases even households with far below-average incomes with a new and usually larger or better equipped apartment.”
According to Aengevelt Research, the criticism of the seepage effects, which is mainly based on the length of the relocation chains, is based on several errors in thinking: Firstly, the supply effect desired by housing policy is often already achieved when a relocation chain is interrupted. Secondly, needy households are spared price-driving competitors on the housing market if socially stronger households are supplied with a new apartment.
Dr. Wulff Aengevelt, Managing Partner of DIP partner Aengevelt Immobilien: “The mathematics cannot be overridden. Every newly built apartment relieves the housing market. What we urgently need are economies of scale. And if the construction of high-quality housing can achieve even greater economies of scale than the construction of social housing, then we should support this. In particular, home ownership subsidies are particularly efficient, because even comparatively small subsidies are sufficient to help house builders over the cliff. And as the relevant studies objectively show, it also has the most pronounced seepage effects. The construction of senior citizens’ apartments and micro-apartments is also useful in terms of housing policy. Ideally-free, the following applies in sum: Every newly built apartment helps – even if it is a luxury apartment.”
