Population Forecasts For Germany Look Too Gloomy

Population Forecasts For Germany Look Too Gloomy


Demographic predictions for Europe in 2050 are rather scary. About one third of western Europe’s population will, by then, be over 65. And the population of, for instance, Germany and Italy will have shrunk by almost 15% and 25%, respectively, according to UN forecasts.

However, population forecasts for Germany look way too gloomy as the birth and immigration rate estimates appear too low.

The immigration rate has already picked up, and it will further. And many of those immigrants come from our own continent – actually the very European Union. In Berlin, we already see numerous young Spaniards or Italians coming over with all their belongings to settle down in the German capital and start a new life. Why? Because  the chances for employment are better, the economy is growing, the rents are still affordable, the cultural offering is impressive, and they don’t even need a visa to get in and work there.

A second factor likely to drive population growth is birth rates. Whilst this may sound surprising, I believe they could recover. First, the benign economic environment we have seen in Germany over the last few years, driven by low interest rates, a relatively weak currency and a strong housing market, will help consumer confidence and reflect positively on people’s willingness to start a family. Do not forget about the rising flexibility in not only working hours but also work locations (with a laptop, a mobile phone and cloud computing, working mothers are under much less pressure to commit to an office or even pre-defined work hours, in some cases).

History ends up repeating itself, and I believe that we are, for those reasons, only a few years away from the beginning of a clear recovery in German and – maybe more generally – Northern European birth rates.

In can only conclude from this that the German housing market will continue to benefit from population growth, as scarcity increases and prices rise, eventually resulting in the gentrification of areas seen before as unattractive or marginal.