The number of new buildings in Lower Saxony is falling dramatically – what’s next?

The number of new buildings in Lower Saxony is falling dramatically – what’s next?

Uncertainty on the housing construction market in Germany is increasing. According to Susanne Schmitt, director of the VdW Lower Saxony Bremen, the number of apartment completions is declining sharply. At an annual press conference in Hanover, it was announced that the total investments of the 180 member companies will rise to almost 1.3 billion euros in 2024, compared to 1.2 billion euros in 2023. However, a decline in investments to around 1.1 billion euros is forecast for 2023. Landlord Guide reports that new housing developments continue to decline.

New construction investments were estimated at 410 million euros last year, while a further decrease to 364.5 million euros is expected for 2024. These figures illustrate the drastic decline in new building activity in recent years, as new building investments in 2021 amounted to almost 700 million euros. Publicly subsidized housing has also suffered: In Bremen, only 104 buildings were completed in 2024, a decrease of 31% compared to 152 in 2023. In Lower Saxony, the number of completed apartments fell from 616 completed apartments to 418.

The change in housing policy

The discussion about the future of housing construction is becoming more and more intense. Many social landlords and private owners are shifting their investments from new construction to modernizing existing properties. Current surveys, such as those by VNW, show that 88% of social landlords in Hamburg do not believe that the ambitious goal of 10,000 building permits annually can be achieved. In this context, the GdW reports a decline of over 35 percent in building permits for multi-family houses compared to 2021.

The regulations, in particular the extended rent cap, are contributing to the reluctance to invest in new construction projects. The president of the IVD warns that this regulation deters both builders and investors. These negative developments mean that 83% of the companies surveyed in the VNW survey plan to invest the majority of their investments in the renovation of existing housing rather than in new construction projects.

Strategies to overcome the challenges

Important topics such as climate protection and CO₂ reduction are coming into focus. The “Practical Path for CO₂ Reduction” initiative calls for a pragmatic approach to sustainable climate protection in the building sector. Technologies such as heat pumps, photovoltaics and solar thermal energy are becoming increasingly important in multi-storey housing construction. At the same time, architects and planners must concentrate on energy renovation and conversion of the existing housing stock.

The market for architects and planning offices is therefore shifting towards existing architecture and energy-efficient renovation. The Federal Chamber of Architects emphasizes that maintaining and converting the existing building represents a cultural and technical challenge. Political objectives and the current market reality are increasingly diverging, which requires a rethinking of housing policy in order to ensure planning security.

In summary, it should be noted that despite increasing total investments, the number of new buildings remains at a historically low level. The challenges in residential construction require a rethink in the industry and increased attention to modernizing existing buildings. Housing Industry Today reports that The reality in housing construction contradicts the political approaches and a new course is urgently needed.