Residential building permits up 30% on refugee demand
Germany has seen a 30.4% rise in the number of residential housing permits granted in the first half of 2016 compared to last year, according to Destatis, the German Federal Statistics Office. The influx of refugees, Germany's stable employment situation and the low interest rate environment are given as the reasons for the sizeable jump in building permits issued.
The number of permits for new flats comes to 182,800, the greatest annual number since the year 2000, when 185,000 were issued. The biggest increase was in the sector of hostels, where 7,900 more were issued than a year earlier, a rise of 174.2%. Of these, 7,100 were issued in the first five months alone.
Compared with the first half of 2015 there was a 30.7% rise in permits for homes in apartment buildings, an 18.3% rise for homes in semi-detached houses, and a 12.0% rise for homes in detached houses. The percentage rise in permits for homes in apartment buildings apart from hostels was 22.5%. From January till June, more permits were issued for flats in hostels than for homes in semi-detached houses, the numbers being 12,400 and 11,300 respectively. Altogether 154,500 permits were issued for homes in purely residential buildings.
Felix Pakleppa, general manager of the Zentralverband des Deutschen Baugewerbes (German Construction Association), finds these figures acceptable in principle: "If the trend goes on, then with about 360,000 building permits we shall have nearly the number of buildings needed to meet the demand."
But he cautions that not all permits tend to be used. In 2015 for instance there were 309,000 permits for new homes, the greatest number since the year 2000, but the number of homes then actually built came to 248,000, only 80.3% of those permitted.
‘Moreover,’ says the president of the BFW, Andreas Ibel, ‘there is mostly a lag of about two years between the permission and the placing of a building on the market. By then the full effect of immigration should be felt. The 30.4% rise in the number of permits gives the impression that the end of the housing shortage is in sight, but this is unlikely.’
A more reliable index may be the number of buildings actually built. In 2015 for instance the number was 248,000, only 1% more than in 2014 and much less than was actually needed. Axel Gedaschko, the president of the Central Association of the Housing Industry, GdW, believes that the number needed annually is more like 400,000, especially in growing metropolitan areas but that building is being hindered by the rising costs of energy and land. Other experts cite a figure of 350,000 annually up to the year 2020.
Urban areas lacked about 800,000 affordable flats even before the mass influx of refugees, so the prices and rents of housing in Berlin, Hamburg and Munich have soared. The government has resolved to more than double its funding for subsidized housing to more than €1 billion this year and to raise it to €1.5 billion in 2017 and 2018.
The shortage may be eased by modernising and developing buildings from the 1950s to 1970s, for according to the Federal Institute for Building, Urban Affairs and Areal Development (BBSR), about 40% of German buildings were built then. Indeed, in the first half of 2016, the number of new homes due to converting and extending buildings came to 25,834, which is a rise of 45.5% and the greatest number since 1998, when the number was 27,600.
The extension of existing buildings for non-residential purposes from January till June 2016 was greater than in the tallying period in 2015 by 16.8 million sqm. This was a 19.3% rise to 104.1 million sqm
Even the German Construction Association has been caught napping. The volume of orders in the building sector rose from €29.2 bn in the first half of 2015 to €34.5bn in the first half of 2016, a rise of 18.3%.; and the turnover rose from €27.5bn to €29.7bn, the 8.3% rise being more than double the expected figure. Most growth was in the housing sector, where the turnover rose by 16.8% to €4.8bn, and the trend is continuing.