Markus C. Hurek
Verena Hubertz, Federal Minister for Construction
The German government has unveiled its long-awaited draft law designed to accelerate housing construction by cutting red tape and easing planning restrictions. But within days of launching the so-called "construction turbo," the same ministers also announced a raft of tighter rent controls and extended conversion bans, deepening investor anxiety and exposing internal contradictions in housing policy.
The legislative package centres on Section 246e of the Building Code (BauGB), allowing far-reaching deviations from local planning rules until the end of 2030. These include shortened procedures, relaxed noise protection standards, and fast-tracking of developments without full urban plans. Municipalities must approve such deviations, but their sovereignty is otherwise curtailed. Other proposed changes include an expansion of exemption clauses in Sections 31 and 34, a five-year extension of temporary provisions under the Building Land Mobilisation Act, and a clearer framework for managing noise conflicts.
The new Construction Minister Verena Hubertz, just weeks into the job, is promising speed, serial building techniques, and new technologies. Her presence at the recent ZIA Tag der Immobilienwirtschaft in Berlin was met with evident optimism, where an audience of industry leaders—long disillusioned by legislative inertia—gave her a notably warm welcome. The sentiment was clear: the sector is desperate for a minister who can actually deliver. "We have to get the excavators rolling again," she told her audience, repeating her earlier message to the Bundestag. Prefabrication, 3D printing, and timber towers are part of her pitch to halve construction costs—from €5,000 to €2,500 per square metre. In media interviews, Hubertz has argued that cost reductions of 30 to 40 per cent are "easily achievable," while emphasising the need to confront land speculation, reform approval processes, and extend state housing subsidies.
A legislative sprint meets regulatory gridlock
Critics, however, see a glaring mismatch between ambition and execution. The Builders' Protection Association (BSB) warns that serial construction is no miracle cure. Cost savings in the private sector are typically in the low single digits, not the double-digit discounts claimed by the minister. Heritable building rights, another tool touted by the government to reduce homeownership barriers, are also viewed sceptically due to opaque renewal clauses, rent adjustments, and financing hurdles. "We must not promise people castles in the air," said Florian Becker, managing director of the BSB. "There won't be a single solution to the crisis."
The BSB also warns that many of the measures being floated, while appealing on paper, fail to address the practical needs and legal uncertainties faced by private home builders. Owner-occupiers currently account for around one third of new residential construction in Germany, yet they are largely absent from the government’s strategic framework. Without reforms to the land transfer tax, simpler approval procedures, and targeted support for families, the BSB believes there is a serious risk of undermining this segment of the market. The association has also pointed to the limited long-term benefit of leasehold models, where high ground rents and uncertain terms erode affordability and complicate succession planning. In the BSB’s view, any housing policy that excludes this group will fall short of its ambition to deliver socially rooted, economically sustainable homeownership.
At the same time, measures are being introduced that run directly counter to the programme's aims. The cabinet has already agreed to extend the rent cap (Mietpreisbremse) until at least the end of 2029. Hubertz and Justice Minister Stefanie Hubig are also pushing for additional constraints on index-linked rents and the loophole of furnished lettings. And the prohibition on converting rental flats into owner-occupied condominiums in tight markets will remain in place until 2030—further stifling exit opportunities and individual ownership.
Dirk Wohltorf, president of the German Real Estate Association (IVD), likened the policy to pressing the accelerator and the brake at once: "You not only fail to move forward, you destroy the entire transmission." He argues that average earners are being denied their only realistic path to homeownership through the purchase of existing apartments. "Anyone who is serious about expanding the supply of housing must mobilise private capital," he warned. "Instead, the minister is sending out contradictory signals that undermine planning security."
Investor appetite meets mixed messaging
This lack of coherence has left institutional investors uneasy. Active capital is increasingly being directed toward value-add residential and mixed-use assets, particularly in B- and C-cities. The fundamentals are supportive: strong rental demand, limited new supply, and regulatory pressure for energy-efficient refurbishment. Yet the appetite for re-engagement depends on predictability and legal certainty—both now in short supply.
"Demand is high across Germany, but real estate values will only increase if craftsmanship is applied," said Dominik Barton, CEO of the Barton Group. Others, like HIH Invest and HAL REIM, are leaning into repositioning and energy upgrades as a means to restore returns. But as Lars Bothe of HIH noted, “Today’s market requires more than passive portfolio management.” What it also requires is a policy environment that doesn’t change direction with each press release.
For now, the government’s housing strategy remains an unresolved hybrid: a construction turbo on paper, bogged down by the very rules it refuses to let go of. Investors are left reading the signals; while the gears may be greased, the direction of travel is still anyone’s guess.