Meeting Germany's growing senior housing demand

Longer life expectancy and robust social protection systems mean a growing number of people in Germany require specialised housing.

Eurostat forecasts that the number of people aged 65 or older will increase from 18.7m in 2024 to 20.9m in 2030 (i.e. one-quarter of the population). Yet despite the clear demographic trajectory, the development of appropriate housing stock in Germany has stalled.

According to IMMOTISS, there were approximately 583,000 apartments in independent senior and assisted living establishments in 2023, and 893,000 beds in care homes.

A closer look at the largest urban areas in Germany reveals notable regional disparities. BONARD's analysis of the provision rate (i.e. number of beds in assisted living establishments specifically per the number of seniors) in the largest 20 cities shows that Bielefeld, Berlin, Köln and Duisburg face significant senior housing shortages and remain far from reaching the saturation point, chiefly due to structural supply and demand imbalances.

In addition, new stock is not being delivered at a pace that would help gradually close the supply-demand gap.

As a result, the shortfall in senior housing bed capacity is anticipated to worsen in some larger cities – especially those where scarcity of land and high construction costs hinder new development – and developers are increasingly turning to hotspots where unmet demand meets with more accessible sites. 

• independent living ('Seniorenwohnhaus' and 'Gemeinschaftliches Wohnen')
• assisted living ('Service-Wohnen' or 'Betreutes Wohnen')
• care-dependent establishments ('Pflegeheime').

Assisted living establishments, which include residential communities and retirement houses, are becoming more popular thanks to changing customer expectations, improved quality of services and active promotion by asset operators.

The TK-Meinungspuls 2025 survey shows that while 90% of elderly people prefer to be cared for at home, 77% would consider assisted living, 66% multi-generational housing and 64% flat sharing with other seniors (up from 59% in 2018), which documents growing appetite for such housing options.

Evolution in customer preferences is driving the development of new and hybrid senior living concepts.

Co-living, rooted in Germany's strong rental culture, and shared senior living assets ('Senioren-WGs') where residents live together in a home-like but supervised setting, including recent projects in Dorfen, Sinzheim and Neu-Ulm, emphasise autonomy, cost-efficiency and social connection.

It is quite common for seniors who are overburdened with their apartment's utility and maintenance costs to switch to Betreutes Wohnen while renting out their accommodation.

Uptake in multi-generational and cooperative housing, such as Berlin's Onni House and Hamburg's Seehof project, signals the growing preference toward socially integrated models where some of the rooms are allocated to seniors and various age groups coexist to support each other.

Meanwhile, the conversion of former office buildings into senior-friendly residences represents another stream of increasing the senior housing supply. This model often features modern technology such as sensor-based safety systems, telehealth monitoring and delivery apps, which can also lower the site's energy footprint, such as Flag's project in Wiesbaden.

In years to come, options available to seniors will continue to diversify. Senior living solutions will be adapted to accommodate various lifestyle preferences, care needs and income levels. Moreover, as the population ages, accessibility, quality services and around-the-clock support will be increasingly sought after.

At the same time, fragmentation in the supply, differences in regulation on state-by-state basis and macroeconomic uncertainty make it difficult to build portfolios of greater scale and achieve efficiencies in operations.

High construction and financing costs make many projects financially unfit, hampering new development. On the operational level, the market is challenged by staff shortages, rising employment costs and several operators filing for insolvency.

The lack of qualified staff is mostly due to Germany's rapidly aging population – there are simply not enough healthcare workers to cope with demand – and other sectors offering more attractive salaries and working conditions.

Sites in urban centres are preferred because they offer easier family visits, stronger transport links and proximity to hospitals. These advantages support higher occupancy, faster mobilisation, better staff access and stronger resale prospects.

While centrally located, value-add projects attract investors, economic viability remains a concern and appointing a reliable operator is increasingly important.

In terms of investor activity in the healthcare sector, BNP Paribas reported that investment volumes in 2025 reached €1.4bn.

While this constitutes an 18% increase compared with 2024, it must be noted that one-third of this volume was attributed exclusively to two deals in the first half of the year: the sale of Hamburg's P&W Care & Living portfolio (€380m) and M&G Real Estate's acquisition in Erftstadt (€82.5m).

Compared with 2021 when peak investment volume was just below €4.5bn, the future speaks to both opportunities and hurdles in the sector.

A solution to advance supply development is to facilitate both German and, perhaps more importantly, international investment in the sector; German investment currently represents 81.6% of investor activity.

Addressing structural challenges can therefore facilitate the sector's growing appeal among foreign investors.

These developments ranged from dedicated senior living residences to multi-generational quarters and senior housing spaces integrated within existing urban developments.

In small towns and rural areas like Hamminkeln, alternatives such as bungalows and tiny houses continued to be explored to meet the desire to live in familiar surroundings.

Eyeing longer-term development, several companies are expanding their presence and bed capacity in the German senior living market.

For example, Cureus is developing 5,350 new units in care homes that are under construction and in the pipeline, while Wohnvoll AG and Goldbeck aim to deliver 3,000 age-appropriate apartments across 30 projects by 2030.

Ultimately, emerging senior housing establishments redefine what later life can look like in Germany.

From shared housing to premium residences, developers are responding with creativity using concepts that emphasise service quality, social connection and dignity.

However, to achieve the much-needed scale and accelerate deployment of new supply, cross-stakeholder initiatives to address issues of land use, permitting, staffing, affordability as well as the effect of the new healthcare reform will be essential.