Home ownership in the countryside: Thuringians dream despite the construction crisis!

Home ownership in the countryside: Thuringians dream despite the construction crisis!

In Germany, interest in housing construction is emerging, while the construction industry is facing serious challenges. There is a growing longing among Thuringians for their own home that is not only surrounded by greenery, but is also larger than the usual living space and often has a swimming pool. However, a survey shows that around a fifth of those surveyed fail due to financing. These observations were confirmed by construction financiers at Commerzbank. The new Federal Construction Minister Klara Geywitz has announced that she wants to make construction cheaper and more spartan, which in part means planning for fewer sockets, less sound insulation and fewer basement rooms.

With these measures in mind, however, it remains unclear whether replacing basements or underground car parks with swimming pools will actually reduce construction costs. Many builders and house hunters express dissatisfaction with the lower minimum standards being sought. Social housing is also seen as essential to create affordable living space. Meanwhile, construction costs remain high and interest rates are rising, stalling many construction projects.

Crisis in the construction industry

The construction industry in Germany is in a deep crisis, as various analyzes show. High construction costs and rising building interest rates contribute significantly to the fact that many construction projects cannot be realized. Chancellor Olaf Scholz is calling for a rethink in building policy and suggesting building new districts. In urban centers like Berlin, it is becoming increasingly difficult for many tenants to find affordable living space.

In order to counteract this problem, the federal government has decided on various measures to promote the construction industry. These include financial incentives, faster planning and approval procedures and the waiver of planned energy building standards in certain areas. Another focus is on promoting energy-saving houses and supporting young families in renovating old properties.

Growth goals and challenges

The federal government has set itself an ambitious goal: 400,000 apartments are to be built every year, including 100,000 social housing. The need is acute, as it is estimated that there will be a shortage of around 600,000 apartments this year, 720,000 the following year and 830,000 by 2027. In 2022, only 295,000 apartments could be completed, and a further decline to 245,000 is expected for 2023.

A record housing shortage and a gap in the supply of affordable housing are emerging. The numbers are particularly alarming: According to current estimates, the construction price for one square meter of living space exceeds 5,000 euros, while the average rent per square meter for new apartments should be 21 euros. In addition, the number of building permits from January to November 2023 was almost 26% lower than the previous year.

The challenges facing the German construction industry are significant, and the reactions after the housing construction summit were cautiously positive. Many in the industry are calling for a reduction in building interest rates and a temporary waiver of property transfer tax. In order to further improve the situation, a reduction in sales tax on construction projects from 19 to 7 percent could also be beneficial.

In view of this complicated situation, it remains to be seen whether the federal government's intended measures are sufficient to sustainably overcome the challenges in housing construction and whether the desire for homes in Thuringia and other regions can actually be fulfilled.

For more information you can visit the article in southern Thuringia and Deutschlandfunk read up.