There is still no sign of a turnaround in German residential construction. In April, the number of building permits was also significantly below the previous year’s level.
German housing construction remains in crisis. In April, the number of building permits fell by 17 percent compared to the same month last year to 17,600, according to the Federal Statistical Office.
From January to April, 71,100 permits were issued for the construction and renovation of apartments. This was 21 percent less than in the same period last year. High material and construction costs as well as a significant increase in loan interest rates have made construction projects much more expensive in the past two years.
Call for more government support
Building permits have been declining for months. Associations in the construction and real estate industry are calling for more government funding in view of the housing shortage, particularly in urban areas.
“The bitter reality cannot be denied: Germany’s housing shortage is getting worse,” commented the Central Association of the German Construction Industry (ZDB) on the current figures. “What is not approved today, we cannot build tomorrow and will be missed by tenants on the market. Hundreds of thousands of additional apartments should actually be commissioned now. We are miles away from that.”
“The road to recovery is long”
Recently, however, there have also been signals from the industry that at least give hope that the downward trend is coming to an end. The ifo Institute’s business climate index for the housing construction industry rose from minus 52.3 in April to minus 46.4 points in May.
“The housing builders hope that they have left the trough behind them,” said the head of the ifo surveys, Klaus Wohlrabe. “But the road to recovery is still long.” This is demonstrated by the ongoing lack of orders: In May, 51.7 percent of companies reported this, compared to 55 percent in April.