Housing construction crisis: permits in Baden-Württemberg are collapsing!

Housing construction crisis: permits in Baden-Württemberg are collapsing!

Housing construction in Germany is showing alarming trends at the beginning of 2025. A current analysis shows that the number of approved apartments is continuing to decline, which could further exacerbate the already tense situation on the housing market. In the first quarter of 2024, only 6,100 apartments were approved in Baden-Württemberg, which represents a decrease of 6% compared to the same period last year. New buildings are particularly affected; Here, 4,674 permits were issued for new residential buildings, a decrease of 9%, according to the South German newspaper reported.

However, there is a positive development in the area of ​​single-family homes: approvals rose by 22% to 1,203. In contrast, two- and multi-family houses and dormitories recorded a decline. This development is also reflected in the figures for the construction industry, which is already heading towards a historic low year. In 2024, the total number of approved apartments fell to 26,969 - a decline of almost a quarter compared to previous years.

A worrying trend

The data shows that permits have reduced dramatically in recent years: from 54,557 in 2021 to 50,083 in 2022 to 35,481 in 2023. This negative development poses serious challenges for the construction industry and employers are pessimistic about a quick recovery. Thomas Möller, managing director of the Südwest-Bauwirtschaft, said that there was no trend reversal in sight. Approvals usually precede construction completion by at least one to two years, which puts additional strain on the future of the housing market.

Rising construction costs are another factor exacerbating the situation. In November 2024, construction costs increased by 3.1%. The combination of price increases for materials and energy as well as higher loan interest rates is making construction unprofitable for many companies. Almost 8,500 companies were active in the construction industry in 2024, but the pressure on these companies is increasing.

Urgent need for action

Affordable housing remains one of the most pressing social challenges in Germany. According to the Main Association of the German Construction Industry, the negative development on the housing market is not surprising and another difficult year is forecast for the construction industry. Despite slightly lower mortgage interest rates, economic uncertainty remains and further complicates the situation.

Tim-Oliver Müller, general manager of the main association, emphasizes that housing construction is ultimately also a question of social and location policy. He is therefore calling on the new federal government to create a reliable market environment that enables stable planning and sustainable housing construction. The need for clear funding programs and a simplification of bureaucracy are crucial to mastering the challenges in housing construction. Müller also warns that a lack of affordable housing could lead to social tensions that put a strain on society's well-being.

In summary, there is a worrying trend that not only affects the construction industry, but also the social structure in Germany. The coming months will be crucial in addressing the challenges in housing construction and initiating a turnaround. Innovation and policy action are essential to reduce pressure on the housing market before the situation becomes even more critical. The new government has the responsibility to create the necessary framework conditions to advance housing construction Association office website shows.