Leipzig

As rural areas face depopulation, urban centers like Leipzig are flourishing, attracting families seeking improved work and living prospects. Following a decline after the Berlin Wall's fall, Leipzig, East Germany's second-largest city, has experienced a 29% (+136,830) population increase since 2000, with 616,480 residents today. As Germany's fastest-growing city, Leipzig is projected to have 653,870 residents (+6.1%) by 2040.

Leipzig’s Lord Mayor, Burkhard Jung, aims to make the city Germany's most livable, and this ambition is evident through various urban redevelopment measures designed to enhance, improve, and increase the attractiveness of individual districts.

Investors are increasingly drawn to Leipzig's region, captivated by its potential. A diverse range of districts offers a blend of history, culture, and modernity. Südvorstadt is a lively, liberal area, with Karl-Heine-Straße being a popular destination for cafés, pubs, bars, restaurants, and independent fashion and art retailers. On warm summer evenings, Leipzig comes alive with music, events, markets, and alfresco dining. From Gohlis' elegant villas and parks to Lindenau's lakes and canals, and from Plagwitz's lively startup scene to Connewitz's appeal for students and young families, Leipzig has something for everyone.

Following the fall of the Berlin Wall and German Reunification in 1990, Leipzig faced severe job losses and depopulation due to collapsing East German industries. However, Mayor Wolfgang Tiefensee's 1998 election ushered in new strategies targeting education, urban renewal, economic development, social integration, and environmental reclamation, spurring private enterprise growth and investment.

Leipzig refocused its economy on five high-growth potential business clusters – Healthcare & Biotech, Logistics, Media & Creative Industries, Automotive & Suppliers, and Energy & Environment – which have driven employment growth since 2005. The city has attracted large-scale 'lighthouse firms' whilst maintaining a majority of SME employers known as 'The Mittelstand.'

Thanks to Leipzig's recovery plan, the economy doubled in size since 2000, totalling EUR 28 billion in 2023. Following a slight decline as a result of the coronavirus crisis, the economy is expected to almost double again and reach EUR49 billion by 2040. At the same time, the average GDP per capita, a proxy for the standard of living in the city, is expected to reach EUR75,602 by 2040, a total increase of 231% from the year 2000.

Education has been a cornerstone in Leipzig since the establishment of the University of Leipzig in 1409. As the second oldest university in Germany and one of the oldest globally, it has had distinguished professors like physicist Werner Heisenberg and Nobel Prize-winning chemist Wilhelm Ostwald. Notable alumni include former German Chancellor Angela Merkel, writer Johann Wolfgang von Goethe, and nine Nobel laureates. The urban campus, spread across 38 locations, features its main buildings on the original site, housing three museums and one of Europe's oldest botanical gardens.

Leipzig is also home to six universities of applied sciences and over 150 research institutes and clinics, including the specialist Heart Centre Leipzig and the IZI Fraunhofer Institute for Cell Research and Immunology. Alongside the Academy of Fine Arts—one of Germany's oldest art schools—the city accommodates approximately 40,000 students living and studying in Leipzig today.

Leipzig's thriving economy and ongoing population growth are the main drivers of its housing market. The city is Germany's fastest-growing in terms of population, with 653,870 residents (+6.1%) expected to be living in the city by 2040.

However, housing supply has not kept pace with the expanding population. Since 2000, the population in Leipzig grew by over 136,000 residents needing approximately 80,500 housing units, but only 58,400 were added during that time. If the current construction rate continues, there may be an undersupply of over 8,333 units by 2040.

Supply constraints stem from slow planning approval processes, limited construction sector capacity, and land scarcity. With demand skyrocketing and supply lagging, Leipzig's vacancy rate has dropped from 12% in 2011 to 2% today. This excess rental demand, combined with sustained economic growth, has pushed up house prices and rents.