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Housing construction in Germany: Alarming declines and dramatic demand
Housing construction crisis: Government rejects billions in new funding despite alarm calls from the real estate industry. The decline in new construction threatens the economy.
Housing construction in Germany: Alarming declines and dramatic demand
Housing construction in Germany is still in crisis, and the alarm calls from the construction and real estate sectors are becoming louder and louder. At the “Housing Construction Day” organized by an alliance of associations, it was emphasized that the current decline in new construction could have a negative impact on the entire economy. Completions continue to decline, while the need for affordable rental apartments has increased dramatically.
According to the Federal Association of German Housing and Real Estate Companies (GdW), companies are forced to stop new construction due to the current conditions as it has become unaffordable for both builders and future tenants. Demand remains high, which will lead to a further deterioration in the situation on the housing markets in the coming years.
The real estate industry in Germany states that there is now a shortage of 800,000 apartments, which corresponds to an increase of 100,000 compared to the previous year. This situation has led to calls for immediate special funding of €23 billion, including €15 billion for 100,000 new social homes and €8 billion for the construction of 60,000 affordable homes.
The Federal Construction Minister Klara Geywitz from the SPD responded to the industry's demands, but pointed out ongoing reform projects and clearly rejected additional subsidies. Their argument was based on the impossibility of subsidizing everything that is built, given the enormous financial challenges in construction.
The industry is demanding lower building regulations to make building easier, more cost-effective and faster. Construction costs are described as price drivers, particularly through technical standards, which has led to a historic crash in the construction industry. Last but not least, housing construction is viewed as economically important, as one in seven euros of gross value added is linked to this industry.