Berlin faces sharp decline in demand for day-care places Falling birth rates

Germany's rapidly declining birth rate and soaring rental prices have led to a sharp drop in demand for nursery spots in Berlin, a city once known for its long waiting lists and highly sought-after child-care services. The shift, which has emerged suddenly in the last few years, has left many day-care centres grappling with excess capacity, even as the country continues to face a significant shortage of places for children under three.

“There has been a huge decline,” Claudia Freistühler, managing director of Kindergärten City, which operates 58 day-care centres across the German capital, told the Financial Times.

Freistühler noted that the state-funded group, which typically cares for more than 7,000 children, will see that number fall to fewer than 6,000 by 2025.

“There are just fewer children in total,” she explained, attributing the trend to both demographic shifts and the skyrocketing cost of living in central Berlin, which has driven many families out of the city.

Germany is already facing a shortfall of more than 300,000 day-care places for toddlers, a gap that has been cited as one of the main reasons why many women in Europe’s largest economy work part-time. However, in some of the country's biggest cities, including Berlin, Frankfurt, and Münster, falling birth rates are now causing a different problem: a surplus of available spots.

Germany’s fertility rate has dropped to just 1.35 children per woman in 2024, down slightly from 1.38 the previous year. In Berlin alone, 97 nurseries have closed over the past two years, according to the city’s education department.

Martin Bujard, a professor at the Federal Institute for Population Research, said that low birth rates are "disadvantageous" for the economy.

"They cost a great deal of prosperity," he said, highlighting the added challenges posed by the Covid-19 pandemic, the war in Ukraine, and ongoing inflation. "Crises are poison for family planning," Bujard added.

The sudden oversupply of day-care spaces has left many nurseries struggling to fill vacancies. In the past, Berlin's day-care centres were inundated with applications, but now the situation has reversed. Local authorities had allocated additional funds to increase day-care capacity, but Freistühler said that this expansion came "too late" to respond to the rapidly changing demand. To stay afloat, her organisation is now reaching out to immigrant families from a wide variety of backgrounds.

In response to the shifting demographics, some day-care providers are actively working to attract immigrant families. Paulina Woznicki, manager of a Fröbel nursery in Berlin, said that the centre is focusing on hiring skilled workers who speak foreign languages and making their services more appealing to a broader range of families. The Fröbel group has even used artificial intelligence to advertise in multiple languages and create avatars to connect with families from different backgrounds.

Meanwhile, rising rents are forcing many families to move away from central Berlin, further reducing demand for day-care places in the city’s urban core. With fewer children to care for, day-care providers are under pressure to reduce costs, as their funding is tied to the number of enrolled children.

“We only get money for the children that we are looking after,” said Freistühler.

The trend is particularly noticeable in eastern Germany, where fertility rates are even lower, at just 1.27 children per woman. Waltraud Weegmann, head of the German Nursery Association, said the effects are being felt across the country.

"Even in the wealthier western states, waiting lists are getting shorter," she said. "It is all happening very quickly."

By Sabina Mammadli