Fewer new apartments approved again
German building authorities approved fewer new homes in September than they have for more than ten years. The number of residential units was 19,300, 29.7 percent below the September 2022 figure, as reported by the Federal Statistical Office in Wiesbaden on Friday.
The last time lower monthly figures were recorded was in January and February 2013. This means that only 195,100 new homes have been approved this year after nine months. This was 28.3 percent less than in the same period last year. The annual target of 400,000 units set by the German government therefore remains a long way off.
The office cites high construction costs and unfavorable financing conditions as reasons for the weak development in the face of high demand for rental apartments. Newly constructed buildings accounted for 160,400 units in the first nine months. The statisticians observed the sharpest declines in approvals for two-family houses. The figures are partly based on estimates, as no September figures were available from Lower Saxony.
The main association of the construction industry called for political measures to stimulate housing construction again. Among other things, the real estate transfer tax must be reduced and the state building regulations standardized, demanded Managing Director Tim-Oliver Müller. In addition, refinancing costs would have to come down because around 100,000 apartments that had already been approved were not being built. Investors unanimously stated that they would not be able to finance the increased construction costs with the rents that would then be necessary.
The Federal Government needs to consider reducing the real estate transfer tax and standardizing state building regulations to stimulate residential construction, as suggested by the construction industry's managing director. Despite high demand for rental apartments, the sharpest declines in approvals were observed in the construction of two-family houses due to high construction costs and unfavorable financing conditions, affecting both new apartments and residential construction overall.
Source: www.dpa.com
