The crisis in German housing construction threatens to worsen considerably: At the beginning of the year, the number of building permits for apartments fell more sharply than it had in almost 16 years due to higher interest and material costs.
In January, 21,900 apartments were approved in Germany, a good quarter (26 percent) or 7,700 approvals fewer than in the same month last year. This was announced by the Federal Statistical Office in Wiesbaden on Friday.
This was the ninth consecutive decline and the largest decline since April 2007. The figures include commitments for apartments in new buildings as well as for new apartments in existing buildings.
“The persistently negative framework conditions are showing their drastic effects,” commented the general manager of the Main Association of the German Construction Industry, Tim-Oliver Müller, on the development.
The federal government urgently needs to counteract this with significantly increased funding for new construction. “Otherwise, not only new residential construction will experience a significant slump in both 2023 and 2024,” said Müller.
According to this, 18,700 apartments were approved in January for new residential buildings to be constructed, a drop of 28.5 percent within a year. The permits for single-family houses fell by a good quarter and for two-family houses by almost half.
In the numerically strongest type of building, multi-family houses, the number of approved apartments shrank by almost 29 percent.
trend is becoming more stable
Building permits are an important indicator of the housing shortage in many cities. Despite the high demand for housing, the number of building permits fell by almost seven percent to 354,400 projects last year, the lowest level since 2018.
Because of the sharp rise in interest rates on loans and high construction costs, many builders are holding back on projects or canceling them – from private house builders to large investors. New business with mortgage lending has also been shrinking for months, in January it halved compared to the same month last year.
“Solid Housing Market Crisis”
The housing construction companies also found themselves in an increasingly difficult situation in the medium term. The Central Association of the German Construction Industry (ZDB) stated that the “strict conditions” in the KfW support programs should be suspended for a certain period of time. ZDB general manager Felix Pakleppa warned of a “solid housing market crisis”.
“Housing construction is in a state of shock,” said the ZDB. “We are seeing more and more the results of a rigorously cut funding policy in new construction.”
Federal Building Minister Klara Geywitz admitted in January that the new construction target of the traffic light coalition of 400,000 apartments per year would also be missed in 2023. “There can be no question of a complete halt to construction,” said Geywitz recently about the negative development in the past year.
The backlog of approved but not built apartments is expected to continue to rise. More new apartments were approved in 2022 than were completed in 2021. (dpa, AFP, Reuters)
To home page
