The view of the housing stock has changed in recent years. This is no coincidence, but the result of a development that can be clearly quantified. In 2024, around 14 percent fewer apartments were completed in Germany than in the previous year. A trend that has continued in 2025. The declining momentum in new construction can be better understood by the decline in building permits: Since 2021, their number has fallen by around 45 percent. [1] This means that the basis for future completions is already lacking today. At the same time, the demand for housing remains high. Market analyses continue to assume an annual demand for new construction of well over 300,000 apartments. The difference to actual construction activity has thus increased noticeably. This development shifts the focus. This is also because new projects under the current framework conditions – in particular higher financing costs, increased construction and land prices as well as more complex regulatory requirements – often reach their limits and in many cases can no longer be economically viable. There is room for manoeuvre above all where construction has already taken place.
Where value is created today
The existing stock is thus becoming more of a focus of consideration. This is where it is decided how much substance is actually in a portfolio. And this is less due to the market than to the approach. Those who exclusively manage residential real estate will hardly leverage any potential. On the other hand, those who understand them as assets that need to be actively controlled discover leeway that only opens up at second glance. Value creation is rarely created by a single measure. It develops where asset management understands the property in its entirety. Technical condition, leasing situation, energy quality and positioning in the market are intertwined. It is precisely at these interfaces that development arises. The starting point is always the question: What can this object achieve if you read it correctly?
From portfolio to strategy
Many potentials remain invisible because they are not systematically recorded. Vacancies are treated as a temporary problem, although they often have structural causes. Energy key figures are documented without deriving a strategy from them. Rent developments are traced instead of actively shaped. This is where active asset management comes in. It shifts the focus from pure management to targeted further development. This means not only looking at each object in its current state, but also analyzing it according to its development potential. In practice, it quickly becomes apparent that not every property needs the same attention. Some stocks develop stably on their own. Others react sensitively to small interventions. Still others require a deeper examination because several factors interact. The real challenge is to recognize these differences early on and to draw the right conclusions from them.
The moment of weighing up
But what is right when? Often, several options are on the table at the same time. One property is vacant. It would be obvious to improve the structural condition and create new quality through targeted interventions. At the same time, a look at the market shows that comparable apartments are also rented out without far-reaching interventions – but at a different price level. Both are possible. Now it is time to weigh up. Investing in the substance means tying up capital in the interest of higher rental income. Going over the price is associated with renouncing possible development potential. The decision is not between right and wrong, but between two strategically different paths. The situation is similar with energy-related measures. The condition of a building can justify an intervention. At the same time, the question arises as to whether the timing is right. A comprehensive renovation can be useful. However, it can also be done too early and thus limit room for manoeuvre for later developments.
Implementation decides on impact
The real work begins with the decision for a direction. Because what was precisely timed on paper meets a different reality in the implementation. Measures do not stand alone. In the implementation, it quickly becomes apparent that individual steps influence each other and often develop differently than planned in the process. A property is being upgraded, but letting is picking up more slowly than expected. Or the demand is there, but the implementation is delayed and thus the time window shifts. In other cases, a strategy is set up cleanly, but loses its effectiveness because it is not consistently pursued in everyday life. The quality of the implementation makes the difference. Value creation in existing buildings therefore requires more than a good starting idea. It presupposes that measures are maintained, adapted and controlled in the course of time. Often under conditions that change in the process. This is a process that must be accompanied. And that's exactly where the real lever lies.
Looking beyond the individual object
In addition, what is initiated in the property has an effect beyond the individual property. Local decisions influence the structure of the overall portfolio. Conversely, the strategic orientation of the portfolio determines which measures make sense in the property at all. Not every object has to go through the same development. Some stocks are stabilized and held for the long term. Others are being developed in a targeted manner to strengthen their position in the portfolio. Still others reach a point where a sale is the logical decision. A portfolio is created not only through development, but also through selection. By asking which objects take on which role – and which no longer fit or can be meaningfully supplemented. This is because acquisitions also change the structure of the portfolio and thus the starting point for further decisions. New objects shift priorities and set different standards for what makes sense.
Value lies in existing buildings. The decisive factor is whether you lift it.
Value creation cannot be reduced to a single key figure. It is reflected in the state of the portfolio. A well-managed portfolio is under active control. Stability here is not a state, but a result. It arises because decisions are made that take effect and have an effect. Real quality is clear from the fact that investments do not come to nothing. Measures are set in such a way that they build on each other and move the portfolio in a clear direction. If interventions start at the right place and their impact on existing buildings becomes measurable, then value creation is created.
[1] https://zia-deutschland.de/project/zahlen-daten-fakten-wohnimmobilien/
