Housing industry in NRW sets the course for climate-neutral heat supply - Current survey by NRW.BANK and VdW Rheinland Westfalen

Despite challenging market conditions, the institutional housing sector in North Rhine-Westphalia is continuing to drive the decarbonisation of its properties. When planning modernisation projects and new buildings, it relies primarily on heat pumps, followed by district heating. Conventional gas boilers are becoming less important. These are the findings of a recent survey conducted by NRW.BANK and the Verband der Wohnungs- und Immobilienwirtschaft (VdW) Rheinland Westfalen housing industry association among 127 housing companies and cooperatives in North Rhine-Westphalia.

“Sustainability is one of the key challenges of our time. North Rhine- Westphalia’s housing industry is tackling it and setting the course for an increasingly energy-efficient heat supply,” says Claudia Hillenherms, member of NRW.BANK’s Managing Board. “Through our promotional programmes, we are actively helping to shape this transformation by promoting, in particular, sustainable construction, the energy-efficient modernisation of properties and measures to strengthen climate resilience.”

“The socially oriented housing sector is playing its part in the energy transition. Three out of four companies already rely on photovoltaics, with many offering their tenants the electricity generated. It is therefore all the more important to remove obstacles, as more than half of the companies are now experiencing delays in new construction. This makes it more difficult for many people to find suitable and affordable housing,” says Alexander Rychter, Director of the VdW Rheinland Westfalen housing industry association.

Energy efficiency of existing buildings is improving 
Other survey findings also show that housing companies are actively advancing the energy transition. For example, the energy efficiency of housing stock is increasingly being improved. Energy-efficiency upgrades, particularly the replacement of old heating systems, are among the most common refurbishment and modernisation measures.

At the same time, more and more housing companies are participating in municipal heat planning. This year, almost 60 percent took part in plans for climate-neutral heat supply in towns and municipalities, compared with just 50 percent in 2025 and less than 40 percent in 2024.

Investment climate is showing a differentiated picture
The investment climate in the housing market remains challenging for housing companies. The climate for new construction in particular is mostly rated as poor or rather poor. It is slightly more positive for modernisation projects, but still subdued. 

The two main obstacles to investment in new housing projects are construction costs and current capital market conditions. More than half of the companies surveyed are also facing capacity constraints in the construction and skilled trades sectors. By contrast, the strongest incentives are continued high demand for housing and demographic change, as these are shifting housing requirements towards a greater number of smaller and barrier-free units.

Housing promotion is gaining in importance
In addition, public housing promotion is becoming increasingly important for the current and planned projects of housing companies. It is now important for 71 percent of the companies surveyed, compared with 56 percent in 2025. This is due not only to current capital market conditions, but also to the attractive terms offered by housing promotion, such as low interest rates, long maturities and high repayment discounts, which improve project profitability.

“Housing promotion brings together two crucial aspects: it makes housing affordable for tenants and housing investments profitable,” says Claudia Hillenherms. “Especially in light of the still difficult construction market, it is an important pillar of housing construction in North Rhine-Westphalia.”

Public and municipal corporations, housing cooperatives and private real estate companies took part in the survey. The survey was conducted between June 29 and July 27, 2026.

All survey results are available here. - For further information on public housing promotion in the State of North Rhine-Westphalia, please visit.

Media contact: Caroline Fischer, Press Officer Phone: +49 211 91741-1847, e-mail: presse@nrwbank.de