WIESBADEN (dpa-AFX) – Housing construction in Germany has stalled despite the great demand in many places. In the face of high costs and higher interest rates in the past year, those willing to build hit the brakes. According to the Federal Statistical Office, the number of approved apartments in new construction and conversion fell by 6.9 percent to 354,400 projects. It was the lowest level since 2018 with 346,800 approvals at the time. “If we don’t turn things around soon, the housing market crisis will continue to grow,” Felix Pakleppa, general manager of the Central Association of the German Construction Industry, warned on Friday.
Pakleppa explained that builders and investors are canceling more and more projects because of the high construction costs and higher interest rates. The number of building permits is an important indicator in view of the housing shortage in many cities. However, approved apartments are often not built at first because craftsmen and construction companies do not have the capacity. The number of apartments that will actually be completed in 2022 is not yet available.
The main association of the German construction industry (HDB) expects around 275,000 completions for the past year. In the current year it should be 250,000 at best. “Due to the insufficient funding for new construction of 1.1 billion euros, stricter requirements for energy efficiency and high interest rates, housing associations in particular will not be able to invest,” said HDB general manager Tim-Oliver Müller.
Federal Building Minister Klara Geywitz (SPD) had admitted that the traffic light coalition would miss its target of 400,000 new apartments per year. However, the minister stressed on Friday that there could be no question of a complete halt to construction. “More new apartments were approved in 2022 than were completed in 2021.” Due to significantly deteriorated framework conditions and capacity bottlenecks in the industry, the construction time has increased in recent years. The federal government wants to counter this with simplified planning and approval procedures, among other things.
However, the Central Real Estate Committee recently assumed that by 2025 there would be a shortage of around 700,000 apartments in Germany. That is the equivalent of all the apartments that are currently available in Bremen and Saarland.
In the past year, 304,600 apartments were approved for new residential buildings. That was 7.3 percent less than in the previous year. The decline in single-family homes was particularly strong (minus 16.8 percent). One reason was the expiry of the Baukindergeld in March 2021. According to the information, the number of approved new apartments in two-family houses fell by 13.8 percent. In apartment buildings, 190,400 apartments were approved, 1.6 percent fewer than in the previous year. After comparatively high numbers in the first half of the year, the downward trend accelerated over the course of the year. Around 63 percent of new apartments in Germany are in apartment buildings.
The construction industry was a pillar of the German economy for a long time and has earned well thanks to the real estate boom. Residential construction in particular had given the industry a boost. Last year, private builders in particular held back because of more expensive financing and rising construction prices. 141,100 building permits for new apartments (down 12.6 percent) were granted to private individuals. Companies also submitted fewer building applications. The number of approvals here fell by 3.3 percent to 147,900 projects. In contrast, the number of building permits for apartments at the request of the public sector rose by 17.8 percent to 12,200.
The trade union Bauen-Agrar-Umwelt (IG BAU) warned: “Housing construction threatens to be stalled.” IG-BAU boss Robert Feiger called for the federal and state governments to multiply housing subsidies. In addition, laws and regulations that make construction unnecessarily expensive would have to be sifted through. “If the state now abandons housing construction, it will take an enormous amount of time before it gets back on its feet,” warned Feiger./mar/DP/jha