A cluster of houses
Increasing government restrictions on new-builds has seen them plummet. Single-family homes used to be a much-lauded dream, so why is Germany now turning its back on them?
In the past ten years, around 85,000 single-family homes were built per year in Germany. However, due to the pandemic, sharply rising material and energy costs, more expensive financing and a lack of construction and craft capacities, the numbers are now falling. According to the Federal Statistical Office, 77,000 single-family houses were completed in 2022, a drop of 1.5% compared to the previous year, and this year, that figure is likely to fall yet further.
It’s a highly emotional story in Germany: for 64% of the population, single-family homes are still the most popular type of home, irrespective of political and environmental debates, according to the ‘Wohntraumstudie 2022 (Dream Home Study 2022)’ by Interhyp AG, a German broker of private construction financing.
So why are single-family homes losing their shine? One issue is that increasing restrictions on the designation of building land is increasing the pressure on single-family homes. High land consumption and poorer climate balance is why hardly any single-family houses are to be built in Münster going forward, suggesting that this way of living could become an outdated model. There will also be fewer semi-detached houses and terraced houses, as the council majority of the Greens, SPD and Volt parties has now decided, because they take up a lot of space and their carbon footprint is worse than that of apartment buildings.
Similar debates are now raging in many German cities. In the north of Hamburg, for example, no more new building sites for detached single-family houses have been allocated since 2021, and other urban areas could follow. The districts of Fuhlsbüttel and Langenhorn in Hamburg also imposed more stringent restrictions in 2020, which limited the number of permits that were granted to build single-family homes.
Sharp decline in single-and two-family homes
As a result, the number of single-and two-family homes being built is declining sharply. Last year, just 75,000 dwellings in new single- and two-family buildings were built, a huge drop from the 106,000 units constructed in 2021. A downward trend is expected this year, in light of escalating construction costs. Around 65,000 completions are forecast for 2025, 20% less that the all-time low.
However, not everyone agrees that such buildings should be abolished. The CDU’s Economic Council has warned against a nationwide implementation of such a building ban on single-family houses over fears that it could become a blueprint for other cities. For now, other cities are pushing ahead with similar measures. Wiesbaden is currently discussing a building land resolution that provides for a minimum housing density per hectare, which would essentially put the kibosh on new single-family homes and also semi-detached and terraced houses. This is because the strict rules on housing density - specifying 80 dwellings per hectare of land - can only be met if apartments are built.
Even the German political parties can’t agree on what is becoming an increasingly sensitive matter. Christina-Johanne Schröder, responsible for housing and construction in the Green parliamentary group, highlights limited resources: ‘Nobody wants to ban the dream of living in a single-family house’, adding that the key issue is the renovation, addition of storeys and conversion of existing buildings ‘in order to create living space in an economically and ecologically sensible way’.
Jan-Marco Luczak, spokesperson on building policy for the CDU/CSU parliamentary group, takes a fundamentally different view, disagreeing with the Minister of Building Klara Geywitz’s view that single-family houses are ‘ecological madness at every opportunity’. On the contrary, he maintains that a home of one’s own is ‘freedom in action, good old-age provision and makes one independent of rising rents’.
Predictably, the FDP sits somewhere between the two. Spokesman on building and housing policy for the FDP parliamentary group, Daniel Föst, says that the ecological balance of new buildings is not as bad as is often claimed. He maintains that most of them are prefabricated houses made of wood and brick and, as plus-energy houses, many of them are still ‘small energy centres’.
Will supersizing be replaced by downsizing?
Nonetheless, given that the energy crisis has caused prices for gas, electricity and consumables to skyrocket, the burning question is: how do our homes have to be set up so that we live in a way that conserves resources?
Smaller, energy-efficient homes will need to be the way forward. However, Germans have been supersizing their homes for decades, so the idea of downsizing to apartments – or never upsizing from them – is not going to sit well with many people. Around 30 years ago, the average living space per inhabitant was 34.9 square metres - today, that has swelled to 47.7 square metres. Moreover, there is an ever-increasing number of single households, so smaller apartments make demographic sense.
With rising interest rates - interest rates for new mortgage loans in Germany climbed from 1.4% to 3.6% in 2022 - single-family homes also make less economic sense. However, the government’s goal of building 400,000 new flats per year is woefully behind schedule. The German Federation of Construction Industries estimates that around 275,000 apartments were built in 2022, 18,000 fewer than the previous year. Its outlook for this year is even worse, with only 250,000 units forecast. That’s based on a dramatic drop in granted building permits of over 16% in November 2022 alone. For most of the year, Germany had recorded a 5.7% drop in building permits.
Also compounding the problem is that cancellations in residential construction have continued to rise, finds an ifo Institute survey in April, with 16% of companies reporting cancelled orders. That represents an increase from 14.3% in February and 13.6% in January. ‘The situation in residential construction continues to deteriorate,’ said ifo researcher Felix Leiss. ‘Due to the rapid rise in construction costs and higher financing interest rates, many housing projects are no longer profitable, have been postponed, or are being cancelled altogether. New business is literally collapsing and the industry has grave concerns about its future.’
