For single-family houses, the minus was 33 percent
Quelle: Getty Images/Westend61
The number of building permits fell in April more than at any time since 2007. Politicians promise to ease the situation with speed and a reduction in bureaucracy. An industry expert warns of a “total failure” in numerous major projects.
SThey even carted an excavator to the marquee near the Federal Chancellery, where the construction industry met this week for Construction Industry Day. The excavator stood in front of a virtual screen showing all kinds of piles of rubble. Like in a video game, visitors could steer through the construction site and try themselves as drivers.
The virtual excavator ride could become a symbol of the current situation in construction. Because in reality, such journeys are becoming increasingly rare. After the boom of the past few years, the construction industry is in crisis mode. The slump in the housing.
The figures, which the Federal Statistical Office (Destatis) announced on Friday, illustrate the dimension of the misery. Building permits in April fell by almost 32 percent compared to the same month last year. This is the strongest year-on-year decline since March 2007.
It is particularly pronounced housing crisis in two-family houses. From January to April 2023, building permits for this class halved compared to the same period last year, down 52.1 percent. At single-family homes the minus was 33.5 percent.
Building permits for apartment buildings fell by 27 percent compared to the same period last year. The drastic slump in residential construction resulted from the rise in interest rates on loans and the increase in the cost of building materials.
Speed in approvals and bureaucracy reduction
Politicians are now desperately looking for solutions to the housing crisis. On the day of the construction industry, politicians from the Greens, the Union and the FDP rolled over their heads with suggestions and announcements on how the industry should be given a helping hand. More speed in building permits and the removal of bureaucratic hurdles were the focus of the announcements.
Michael Kellner, State Secretary in the Federal Ministry of Economics, made a commitment to more speed in construction projects on the day of the construction industry. The implementation of construction projects is currently too slow in many places. “But we showed last year that we can be fast if we want to. We have to pick up the pace in our country together,” said Kellner.
In addition, Kellner promised improvements in public procurement law and a reduction in bureaucracy. “This year, as the Federal Ministry for Economic Affairs and Climate Protection, we will advance the issue of public procurement law,” said Kellner. For him it is clear “that we have to reduce bureaucracy”.
Federal Finance Minister Christian Lindner (FDP) called for a return to “proportionality” in the area of public funding in housing construction. Lindner criticized the fact that politicians themselves are driving price increases through ever higher housing standards.
Land transfer tax waiver?
In addition, Lindner campaigned for a “liberalization of the real estate transfer tax“. Each federal state should be able to determine for itself whether it wants to waive the real estate transfer tax for owner-occupied living space. “I wish for a competition between the countries. In this way, the federal states can show who is the most property-friendly,” says Lindner.
CDU General Secretary Czaja stated on the day of the construction industry that “one and two-family house construction had actually collapsed”. The increase in building material costs by an average of 20 percent and the rise in building interest would have ensured that the financing for the home increased three to fourfold.
Czaja criticized the jumble of building regulations. “We need a break from new editions and a show of strength for construction,” said Czaja. He called for the land transfer tax to be abolished for the purchase of one’s own four walls. Czaja describes the KfW funding programs as good in principle, but sees the need for more flexibility in the funding.
Peter Hübner, President of the Main Association of the German Construction Industry, criticized the Energy efficiency standard EH40, which, according to the federal government’s new building specifications, should become the standard from 2025. According to Hübner, this standard would drive up construction costs “extremely”. In addition, the benefit would be disproportionate to the additional costs due to the higher standard.
“Otherwise there will be a loss of prosperity for Germany”
Gerd Högerle, branch manager of MLP Finanzberatung in Ravensburg, explains how urgent it is to remove bureaucratic hurdles in construction. Högerle warns that numerous large-scale projects are threatened with “total failure” if politicians do not take countermeasures. Specifically, he criticizes the approximately 20,000 building regulations and the excessive amount of bureaucracy.
“If people can’t afford to rent or own property in the future, there will be a loss of prosperity for Germany,” says Högerle. Construction projects would become more worthwhile due to the reduction in construction hurdles.
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