Germany housing shortage drives micro-living and affordability strategy, Matthias Euler, Greystar

Описание: Germany’s acute housing shortage, particularly in major cities such as Berlin, is driving growing demand for smaller, more affordable rental homes and reshaping development strategies across the market, according to Matthias Euler, managing director, Germany and Austria, at Greystar.

Speaking to Real Asset Media at EXPO Real 2025, Euler said: “I think the German residential market is one of the hottest at the moment in the world. In Germany, we have a huge lack of residential apartments. People are not finding apartments, especially in the metropolitan regions of the top seven, like Berlin.” He added: “Finding an apartment in Berlin is almost impossible.”

Explaining Greystar’s response, Euler said: “So, what we do — we have two routes. On the one hand, we construct small micro-living apartments with a big part of amenities that people feel like at home. [They] have a first entrance into a residential market, like in Berlin, before they start to search for a long-term apartment.” He added: “So we are sort of a buffer.”

Alongside this, the group is developing more basic housing for long-term residents. “On the other hand, we try to invest into projects which do not have any amenities — no furniture — to allow local people to find an apartment in the long term for lower rents,” he said. “Because we need to ask for rents of €20 to €25 per sq m to cover the construction costs.”

Euler said that while these rent levels remain high, they are stabilising. “They are still high, but they’re stabilised,” he said. “We need a bigger lot size for a project to have a sort of a scaling effect that helps us to cover the costs and to use modular construction and prefab construction. And this is how we try to solve the situation.”

He also pointed to financing constraints across Europe. “The main driver in Europe is the capital, the missing capital,” Euler said. “So, we see lots of developers who have very good ideas, very nice plots, but not the capital to get the construction done.” He added that this is where Greystar steps in “by capital injections with the global presence of Greystar”.

Highlighting the group’s global platform, he said: “We are managing one million apartments worldwide, so we know how to collect equity and to place investors and help them to get invested into Germany. We know how to produce the reporting they are expecting as an institutional investor. So, we are sort of a filter from institutional capital to local presence and local projects.”

Greystar’s operational background also shapes its development model. “Greystar is originally a property manager for residential apartments. We know exactly what they need,” Euler said. “So, we always have at least two full-time employees in the asset: the technical asset manager and a community manager.”

He added that many schemes require redesign. “If we take a look at a plot, we first check the layouts, because normally they are too big, the apartments. They were planned for build to sell and not for build to rent,” he said. “So, we optimise them, we reduce the square metres, we make more units in one asset than originally planned.”

This approach extends to student housing and short-term accommodation. “We also think about PBSA for students, really made for students,” Euler said. “The student has another need. They don’t need 30, 40 sq m in their apartment.”

As a result, “for students, we think about 20 sq m for an apartment”, while larger units of 30 to 40 sq m are aimed at business travellers and project-based workers.

Euler said this combination of targeted design, capital support, and operational expertise is central to addressing Germany’s housing shortage as development costs and funding constraints continue to weigh on new supply.

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