The Federal Homeless Association estimates the current number of homeless people in the country totals around 860,000.
That figure is expected to rise another 40 per cent to 1.2 million by the end of the year, Deutsche Welle reports.
More than half of homeless people in Germany – 440,000 – are refugees, according to federal statistics for 2016.
Not all of the homeless people included in the statistics are living on the streets, however.
The figures also take those living in communal housing and shelters into account – which may account for the extraordinarily high rate of homeless refugees.
The refugees were included in the data despite not being German citizens as they are no less in need of housing, officials in charge of producing the data said.
Angela Merkel’s government’s decision to allow one million refugees to enter Germany in 2015 is believed to account for some of the increase in the number of homeless people in the country.
However the Federal Homeless Association emphasised that “while immigration has dramatically aggravated the overall situation, it is by no means the sole cause of the new housing shortage”.
Instead, short supply of affordable and social housing was largely to blame for Germany’s looming housing crisis.
The number of social housing units across Germany has fallen by around 60 percent to just 1.2 million.
Thomas Specht, director of the association, said in a statement: “The main cause of housing shortages and homelessness is a housing policy that has failed in Germany for decades, as well as insufficient efforts to fight poverty.”
Communes, state authorities and the federal government have pursued a policy of selling off social housing stocks to private investors.
This has made it difficult for many Germans to find housing they can afford.
The news is unlikely to be welcome for beleaguered Chancellor Angela Merkel as she desperately bids to form a three-party coalition in the wake of elections.
Mrs Merkel’s poor showing in September’s general election has left her scrambling to forge alliances with the liberal FDP and the Green Party, who are polar opposites.
FDP leader Christian Lindner has given the talks just a 50-50 chance of succeeding amid huge policy differences on immigration, and a huge split over the EU.