To combat the housing shortage, the federal government wants to build 400,000 apartments per year. According to the real estate industry, this will not succeed in the slightest. She only thinks half of it is feasible.
According to the federal government, 400,000 new apartments are needed every year in order to calm the tense housing market in Germany and to cover demand. However, the industry now only considers half of this to be realistic. “Under the current political and economic conditions, the socially oriented housing companies can no longer invest in affordable housing,” said the President of the Federal Association of German Housing and Real Estate Companies (GdW), Axel Gedaschko.
Instead of the government’s target of 400,000 new homes, the number of homes being built will continue to decline, with only 200,000 new homes being completed each year. The reasons are higher interest rates, inflation, the long-term effects of the corona pandemic and strict political requirements for more climate protection.
housing figures keep decreasing
From the point of view of the GdW, the higher construction prices are also having a particularly negative effect. “In the first quarter of 2023, the increase in construction prices for residential buildings was 15.3 percent compared to the previous year, while the general price development in the same period was only 8.7 percent,” said the association. An unprecedented crisis is imminent. Based on a model calculation, the GdW forecasts cost increases of 38 percent between mid-2021 and the end of this year for tense housing markets.
This is another reason why the number of new apartments will fall to just over 240,000 units this year and to 214,000 next year. According to the association, the government must do everything it can to keep energy costs affordable. Otherwise, price increases would hit the poorer sections of the population first.
In fact, about every third rental household in Germany is overburdened with housing costs. More than three million households pay more than 40 percent of their net income for cold rent and heating costs, according to a study recently presented by the German Tenants’ Association (DMB). In another 4.3 million households, these costs accounted for between 30 and 40 percent of their income.
Target already clearly missed in 2022
According to the Federal Statistical Office, 295,300 apartments were still completed nationwide in 2022. That was 0.6 percent more than the year before. The goal of the federal government has thus been clearly missed. The traffic light coalition wants 400,000 apartments to be built every year, 100,000 of them socially subsidized.
For the first time there has been “large investment in social housing for a long time,” said Federal Building Minister Klara Geywitz in April. This will be funded with a record sum of 14.5 billion euros by 2026. Together with funds from the federal states, a conservative estimate of 36 billion euros could be invested in social housing, according to Geywitz.
But according to the Federal Statistical Office, the 2020 level of 306,400 apartments was not reached last year either. Because despite the demand for living space, the number of permits is falling. Because of the sharp increase in interest rates on loans and high construction costs, many builders are holding back on projects or canceling them. In 2022, many projects also came to a standstill due to a lack of skilled workers and bottlenecks in the supply of building materials.