From January to May, a total of 113,400 building permits were issued for apartments, which was 27.0 percent fewer than in the same period last year.
(Photo: dpa)
Berlin The prospects for German residential construction clouded over again in May. Due to increased interest and material costs, the number of building permits fell by 25.9 percent compared to the same month last year to 23,500 apartments, as the Federal Statistical Office announced on Tuesday.
The number has been falling continuously for a year. However, the pace is slowing down somewhat: in April there was a 31.9 percent slump in more than 17 years, in March the decline was similarly high at 29.6 percent.
“Increasing construction costs and increasingly poor financing conditions are likely to have contributed to the decline in construction projects,” the statisticians explain the downward trend.
Building commitments for single-family homes are falling at an above-average rate
After eight interest rate increases in a row by the European Central Bank (ECB) to currently 4.00 percent, building loans have become noticeably more expensive. The currency watchdogs want to use this to fight inflation and are likely to do more in July.
From January to May, a total of 113,400 building permits were issued for apartments, which was 27.0 percent fewer than in the same period last year. The figures include commitments for apartments in new buildings as well as for new apartments in existing buildings.
The number of construction commitments for single-family homes fell in the first five months by an above-average rate, namely by 35.1 percent to 22,600. In the case of two-family houses, there was an even greater decline of 53.5 percent to 6500. “Even in the case of the numerically strongest type of building, the multi-family houses, the number of approved apartments fell significantly,” emphasized the statisticians. Here there was a minus of 26.5 percent to 61,200.
traffic light destination
400,000
Apartments
should be created in Germany per year.
The Munich Ifo Institute assumes that the number of completed apartments will fall steadily to just 200,000 by 2025. That would be only half as much as the annual target set by the federal government.
The Ifo Institute does not only blame the increased borrowing costs. “At the same time, the federal government has drastically cut back new construction subsidies and tightened the standards for new construction again at the beginning of 2023,” said Ifo construction expert Ludwig Dorffmeister. For this reason, the vast majority of property developers have not initiated any new projects for months.
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