Residential construction is still facing challenges despite a high demand.
In the past year, the number of new building permits issued has seen a steady decline, hitting its lowest point since 2012. With a reported housing shortage, this trend continued even in the first quarter of this year. Various construction and real estate associations are now urging the government to provide more financial aid and to loosen energy efficiency regulations.
The recent drop in the number of new residential buildings in Germany persisted, despite the ongoing high demand for housing. The Federal Statistical Office revealed that in March 2024 alone, there were 14,700 new homes approved - a whopping 27.3% decrease compared to the same period in 2023. Similarly, during the first quarter of 2024, the number of permits issued for new apartments fell by an impressive 25.7%, totaling only 42,800 units.
Single-family homes faced the most significant reduction in the first quarter, witnessing a 35.6% decline to 9,200 units. The number of approved buildings for two-family houses also dipped by 20%, ending up at 3,200 units. As for multi-family houses, which account for the majority of new constructions, there were just 28,700 apartments approved - a 22.9% drop from the previous year.
Combining these figures with the conversion permits for existing structures, the authorities granted approval to 53,500 projects in the first quarter of 2024. This represented a 22.2% decrease, amounting to 15,200 fewer building permits than the same period in 2023.
Building costs on the rise
Construction costs have been steadily increasing due to rising mortgage rates and heightened construction costs. As a result, the dwindling number of building permits has been a common sight for months now. Given the present housing shortage, associations involved in construction and real estate are demanding more government intervention, particularly in urban areas.
Proposed measures include interest rate support programs to encourage private investors to move forward with their projects and a softening of the more stringent energy efficiency regulations. In 2023, building permits were issued for 260,000 apartments, marking the lowest level recorded since 2012.
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Source: www.ntv.de
