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Housing shortage in Germany: construction figures are collapsing dramatically!
Germany is struggling with a drastic housing shortage: construction starts are falling by 85%, while demand continues to rise.
Housing shortage in Germany: construction figures are collapsing dramatically!
In Germany, the situation on the housing market continues to deteriorate. Housing construction has fallen dramatically in the last three years. According to an analysis by Bulwiengesa and BFW, construction starts fell by an alarming 85 percent between the end of 2022 and mid-2025. This year, the area of residential projects planned or under construction has already fallen by more than 5 percent. This development mainly affects smaller cities, where the decline is 10 percent, while in large cities the decline is 6 percent. BFW President Dirk Salewski describes the current figures as a wake-up call and warns of a construction wave of unrealized projects that could further aggravate the situation Focus reports.
A catastrophic result is expected for 2025: fewer than 200,000 new apartments will be completed. Given the current need for at least 320,000 apartments per year, as the Federal Institute for Building, Urban and Spatial Research states, the perspective is becoming even more acute.
Decrease in completions
The situation is further complicated by the figures from 2024, in which only 251,900 new apartments were completed in Germany. This represents a decrease of 14.4 percent compared to the previous year. In the two previous years the numbers were around 294,000 new apartments. Single-family homes are particularly affected, the number of which has fallen by 22.1 percent, while two-family homes have even fallen by 26.2 percent. 135,300 new apartments were completed in multi-family buildings, which corresponds to a decrease of 13.4 percent. Construction activity by companies and private individuals is also declining, which further illustrates the alarming situation ZDF reports.
Causes and solutions
The reasons for the decline are varied. The construction industry is suffering from rising material prices, high interest rates and increasing bureaucracy as well as complicated approval procedures. In order to achieve the traffic light government's set goals of 400,000 new apartments per year, rapid implementation of reforms is necessary. In this context, Construction Minister Verena Hubertz has announced measures aimed at simplifying the approval process, reducing construction costs and clarifying funding conditions.
An investment framework of 23.5 billion euros in social housing planned by the construction minister by 2029 should also offer a glimmer of hope. Nevertheless, the goal of alleviating the pain of high rent prices and the lack of social housing remains a major challenge for the coming years.