Housing construction in distress: The number of building permits in July was 31 percent lower than the previous year. Getty Images
There is a shortage of hundreds of thousands of apartments in Germany. But instead of building more, housing construction collapses.
In July, the construction of 20,000 new apartments was approved. The number of building permits was 31 percent lower than the previous year.
Next week, Chancellor Olaf Scholz wants to discuss solutions with associations and experts at a housing summit in the Chancellery.
There is a shortage of hundreds of thousands of apartments in Germany. As a result, rents are rising sharply in many cities and regions. The shortage also keeps purchase prices for single-family homes and apartments at a high level. To combat the housing shortage, Germany would need at least 400,000 new apartments every year. That is also the goal of the federal government. In reality, however, housing construction in Germany is currently collapsing. The housing shortage is becoming a housing crisis.
The latest alarm signal: The number of building permits for apartments fell to just 21,000 in July, the reported Federal Statistical Office with. That was 31.5 percent less than a year ago. This means that the threatening downward trend has accelerated once again. In the first half of the year, the number of building permits for apartments was around a quarter below the previous year.
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High construction costs, increased interest rates, a lack of land and high government requirements have been slowing down construction for months. According to the Federal Statistical Office, from January to July 2023, the number of building permits for apartments in Germany fell by 27.8 percent or a good 60,000 to 156,200 apartments. Real estate and construction associations assume that the federal government’s target of 400,000 new apartments annually will clearly be missed this year. In the coming year, fewer than 200,000 new apartments could even come onto the market. The gap is opening up.
More apartments are only being built in dormitories
The burglary affects all types of buildings, i.e. single-family or multi-family houses, private homes or apartment buildings, new buildings or new existing apartments. From January to July, 128,300 apartments were approved in newly constructed residential buildings. That was 31.6 percent less than in the previous year. The number of building permits for single-family homes even fell by 36.5 percent to just 30,800. For two-family houses, the number of approved apartments fell by more than half (minus 53.2 percent) to 8,900. In the case of multi-family houses, the number of approved apartments fell by 27.5 percent to 83,600. Only the number of apartments in dormitories increased by ten percent to 900.
Statisticians have not yet seen a clear effect of the regulation, which has been in effect since March 2023 Housing subsidies for climate-friendly new buildings from the Kreditanstalt für Wiederaufbau (KfW). The number of building permits actually fell somewhat more sharply in the period from March to July 2023 compared to the same period last year than in the period from January to July 2023.
On September 25th, Chancellor Olaf Scholz wants to discuss ways out of the housing crisis at a housing summit in the Chancellery with representatives of the housing industry and other experts.
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High interest rates, costs and requirements: Housing construction is threatened with collapse – with consequences for everyone who is looking for an apartment