The conversion illusion: why empty offices won’t fill Germany’s housing gap

The political logic is seductive. Germany's seven largest cities have more than 8.3 million square metres of vacant office space. Those same cities have an acute and worsening housing shortage. From 1st July 2026, investors can apply for grants of up to €30,000 per unit to convert vacant commercial properties into residential apartments, backed by a budget of €300 million for 2026 alone under the new "Gewerbe zu Wohnen" programme. "Vacancies in times of housing shortages are an absolute no-go," Federal Building Minister Verena Hubertz told the mass-market Bild Zeitung. While the name makes it sound straightforward, the market knows it is anything but.

The theoretical potential is real enough. The ifo-Institute estimates that up to 60,000 apartments could be created in Germany's seven largest cities if technically feasible vacant office space were converted. Drees & Sommer puts the national potential at around 152,000 units. Munich's incoming mayor Dominik Krause, who made conversion a centrepiece of his election campaign, cites 1.8 million square metres of vacant office space in the Bavarian capital alone, with the potential for at least 10,000 apartments. Several projects are already in the pipeline, including the conversion of four of Munich's iconic Ten Towers on Leuchtenbergring, where planning approval has been granted for more than 400 units.