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The German real estate industry

On developments, challenges and future perspectives of an industry and the role of intelligent document forensics in the construction sector

Highlights of the real estate industry in Germany

What weighs 200 tonnes on average and is the dream destination for most middle-class families in Germany? That's right, the single-family home. Two out of three residential buildings in Germany are one, and a large part of the real estate industry revolves around them. Would you like to know more interesting facts about the real estate industry?

18.2 million residential buildings...
3,930 Euro per square meter ...
43.4 million flats...
Building permits for 354,400 flats...
There is a shortage of 600,000 flats...
3.9 million employees...
18.2 million residential buildings...

... exist in Germany according to the Federal Statistical Office (as of 2022)

3,930 Euro per square meter ...

... was the average cost of residential property in Germany in 2022.

43.4 million flats...

... exist in Germany, also as of the end of 2022.

Building permits for 354,400 flats...

... were granted in 2022, many of them in the high-price range.

There is a shortage of 600,000 flats...

... with affordable rents by 2025.

3.9 million employees...

... currently work in the real estate industry in Germany, according to the Central Real Estate Committee (ZIA)

Development of the real estate industry in Germany

The German real estate industry has grown and grown over the past decades. Particularly since the 2008 financial crisis, property has been considered a safe investment, which has driven prices up. Recently, the market has entered a consolidation phase, characterised by rising interest rates and high construction costs.

Required documents for real estate transactions as a fraud factor

In Germany, numerous documents are needed to purchase a property, ranging from identity cards or passports to financing confirmations, land register extracts, energy performance certificates, and cadastral maps. For rental agreements, tenants are typically required to provide identity cards, proof of income, rent arrears clearance certificates, guarantees, and often a Schufa credit report.

Real estate as a gateway for document fraud

There are frequent reports that housing shortages, especially in large cities, are encouraging fraud related to rental advertisements: 90 square metres, four rooms, close to the centre in Munich, Leipzig or Hamburg for 1000 euros including utilities? Unlikely. However, it's not only those searching for accommodation who struggle with fake ads; property owners also face challenges with false documents: forged identity cards, manipulated proof of income, or fabricated land register extracts. 

The exact amount of damage is difficult to quantify but is estimated to be several million euros annually, which is why digital solutions for document verification have proven effective for the real estate industry. ICO.Match, for example, helps to capture and contextualise many documents in high resolution within a very short time – so that forged documents can then be exposed using ICO.Fraud, allowing flats to be allocated to honest tenants.

Any questions? 
Let's talk.

Jan Franke

+49 3641 92 90 988 jf@ico-lux.com