Noticeably less construction approvals in July
The decline in construction permits persisted in July. A total of 17,000 housing units were given the green light in that month, representing a 19.2% drop compared to July of the previous year, as reported by the Federal Statistical Office in Wiesbaden on Wednesday. Over the first seven months of the year, permits decreased by 20.8% compared to the same period in 2021.
Single-family homes witnessed the most significant drop. During the initial seven months of the year, 28.4% less permits were issued for single-family homes compared to the corresponding period last year. Two-family homes observed a 14.7% decrease in approved housing units, while the numerically dominant building type, multi-family homes, registered a decline of 21.6%.
Leaders in the German construction industry characterized this trend as a return to 2012 levels. "What's even more concerning: There's no indication of a shift in that trend. The housing shortage is set to overshadow the upcoming federal election campaign," stated the CEO of the German construction industry's main association, Tim-Oliver Müller, commenting on the figures. The high interest rates and construction costs seem to be hindering housing construction.
Sebastian Dullien, the scientific director of the Institute for Macroeconomics and Economic Research (IMK) of the Hans-Böckler Foundation, predicted that things might worsen. "We're still yet to hit rock bottom, and the optimistic signs from previous months have proven to be misleading," he clarified. Currently, the approved building permits equate to around 200,000 new housing units per year. The government initially aimed to achieve double that figure.
In July, the decline in construction permits continued, as revealed by the Federal Statistical Office. Despite July seeing 17,000 housing unit approvals, this represented a significant 19.2% drop compared to July of the previous year.
