Housing construction is on the rise: building permits were issued for 126,300 homes in the first half of the year, 15.1 percent more than in the same period a year earlier, the Federal Statistical Office in Wiesbaden announced on Tuesday. This was said to be the strongest increase since 2016 — although it came from a low starting level. The construction and housing industry nevertheless still sees no turnaround.
The number of building permits for single-family homes rose by 12.7 percent to 24,000 in the first half of the year, while for two-family homes the increase was even higher at 27.3 percent, reaching 7,700. In apartment buildings, authorities approved 67,000 newly built homes, an increase of 16.9 percent. The remaining homes were approved in residential halls and in already existing buildings.
In June alone, 21,600 homes were approved according to the statistics office, 13.8 percent more than in the same month of the previous year. The number of homes in new buildings rose by 14.1 percent to 17,800, and the number of homes created through conversions rose by 12.1 percent to 3,900.
"Housing construction is showing initial signs of a slight recovery," said Felix Pakleppa, Chief Executive of the German Construction Confederation (Zentralverband Deutsches Baugewerbe). "But we are still a long way from a turnaround." He said the problem was that, alongside the rising number of permits, more projects were once again being cancelled. "A building permit is not yet a built home."
"Incoming orders also remain fragile, which shows that there is still little construction going on," said Tim-Oliver Müller, Chief Executive of the German Construction Industry Federation (Hauptverband der Deutschen Bauindustrie). "High interest rates and construction costs continue to hold housing construction in a stranglehold."
Federal Building Minister Verena Hubertz (SPD) attributed the rising number of permits, which has now been increasing for 13 months, to the government's policies. The development was "the result of targeted policy," she said. "The construction turbo is picking up speed, our funding programmes are being widely taken up, and the upgrade of the Building Code is in the starting blocks."
Hubertz conceded: "We are coming from a low level, and we are still far from where this country needs to be when it comes to housing construction." The minister announced that the government would follow up, "with a massive deployment of funds for social housing, the further reduction of bureaucracy and the founding of a federal housing construction company for more affordable living space."
Dirk Wohltorf, President of the German Real Estate Association (Immobilienverband Deutschland, IVD), contradicts the minister. "The construction turbo can hardly be felt so far, building type E is still keeping us waiting, and the announced reform of new-build funding is not supposed to come until 2027," he criticised. "All of this is taking too long and is not reaching people as a powerful signal for more housing construction."
Like the IVD, the property owners' association Haus & Grund also criticised the federal government's planned tenant protection rules. "What Federal Building Minister Hubertz is celebrating today as a housing construction comeback, the Federal Justice Minister threatens to tear down again tomorrow with her plans to regulate tenancy law," association head Kai Warnecke told the "Rheinische Post."
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