Apartment building
Prospects for Germany closing the gap between the housing accomodation it needs and the amount of new apartments being built, look to be receding sharply following recent figures released by the country's Federal Statistics Office.
These show the number of building permits issued in March fell by the highest amount in 16 years. Only 24,500 apartment building permits were issue, down 29.6% or 10.300 units on the same period a year ago.
A total of 68,700 permits for apartments were issued from January to March, 25.7% fewer than in the same period last year. The number of new building permits issued has been falling steadily since May of last year. The figures include approvals for apartments in new buildings as well as for new apartments in existing buildings.
The number of building permits for single-family homes slumped by an above-average 31.1% to 14,300 in March, while there was an even larger drop of 51.9% to 4100 for two-family homes. "The number of approved apartments also fell significantly for the building type with the highest numbers, multi-family homes," said the statistician, with this number down 25.2% to 37,200.
After 295,000 completions last year, industry estimates suggest that at best 250,000 apartments are likely to be completed across Germany this year. That number is sure to fall next year, with the gap to the estimated 700,000 new units required widening even further. Without a major shift in the government's approach to providing subsidies and incentives to build, the construction industry is "heading for a crash landing", said Felix Pakleppa, the head of the German Construction Industry Federation, this week.
Axel Gedaschko, the president of the Federal Association of German Housing and Real Estate Companies (GdW), said: "The consequences of the numerous cancellations under the current framework conditions will only take full effect in the next few years. The crash is looming and must be stopped urgently", he said.
Dirk Salewski, president of the Federal Association of Free Real Estate and Housing Companies (BFW), warned: "Looking in the rearview mirror is deceptive. The supposed recovery reflects the situation before the crisis, because that's when the permits were issued. We'll see the real situation in the figures for 2023 and 2024."