A sharp drop in building permits indicates an accelerated decline in housing construction in Bavaria in the coming months. In the first nine months of this year, 42,740 apartments were newly approved – a year-on-year decline of 30.1 percent. The State Statistical Office announced this on Wednesday.
Experts see the simultaneous increase in construction costs and real estate interest as the main reasons for this development. For the first six months of this year, the state office reported a decline of 27.2 percent. The numbers indicate that many rural citizens are putting their dreams of owning their own house on hold or burying them because of the increase in costs: approvals for new single-family homes fell by 35.7 percent. For new two-family homes there was a decrease of 54 percent.
In the big cities – where a larger number of multi-storey apartment buildings are being built than in the countryside – the decline was comparatively moderate at just under ten percent. In the districts it was minus 37.1 percent.
Regionally, the east and north of Bavaria were hit harder than the south. The biggest drops were in Lower Bavaria and Lower Franconia with around 44 percent each, the lowest in Swabia with minus 16 and in Upper Bavaria with minus 22.9 percent. In between were Upper Palatinate (-31.9), Upper Franconia (-32.7) and Middle Franconia (-38.3).
Residential building permits are not the same as residential construction, as not every approved apartment is actually built. However, experience shows that if the number of permits collapses, construction activity also declines.