Slump in residential building permits by 30 percent
A sharp slump in building permits points to an accelerated downturn in residential construction in Bavaria in the coming months. In the first nine months of this year, 42,740 new homes were approved - a year-on-year decline of 30.1 percent. This was announced by the State Statistical Office on Wednesday.
Experts see the simultaneous rise in construction costs and real estate interest rates as the main reasons for this development. For the first six months of this year, the state office had reported a drop of 27.2 percent.
The figures indicate that many people in rural areas are putting their dreams of owning their own home on hold or burying them due to the rise in costs: Permits for new single-family homes fell by 35.7 percent. The number of new two-family homes was down 54 percent.
In the major cities - where a larger number of multi-storey apartment buildings are being built than in the countryside - the decline was comparatively moderate at just under ten percent. In the rural districts, the figure was down 37.1 percent.
Regionally, the east and north of Bavaria were hit harder than the south. The sharpest declines were recorded in Lower Bavaria and Lower Franconia with around 44 percent each, the lowest in Swabia with minus 16 percent and in Upper Bavaria with minus 22.9 percent. In between were Upper Palatinate (-31.9), Upper Franconia (-32.7) and Middle Franconia (-38.3).
Residential building permits are not the same as residential construction, as not every approved dwelling is actually built. However, experience shows that if the number of permits falls, construction activity also declines.
Despite the decrease in residential building permits, many individuals in rural areas continue to aspire for home ownership. However, the increase in construction costs and real estate interest rates are causing delays or abandonment of these living aspirations, as evident in the 35.7% drop in permits for new single-family homes.
The data from the State Statistical Office also reveals a significant decline in the construction of new two-family homes, indicating a potential stagnation in the construction sector's growth due to these statistics.
Source: www.dpa.com
