Housing construction crisis worsens: construction industry appeals to the federal government

Housing construction crisis worsens: construction industry appeals to the federal government

According to a report from www.fr.de, the crisis in housing construction continues. In the summer, the number of residential building permits reached a low. The construction industry is again calling for action from the federal government. In August, housing orders fell by 31.6 percent. From January to August 2023 there was a decrease of 28.3 percent compared to the same period last year, which corresponds to a decrease from 69,100 to 175,500 apartments. These declines in permits are an indicator of future construction projects. The President of the umbrella association of the housing industry GdW, Axel Gedaschko, emphasizes the need for new affordable housing and warns of social conflicts.

To analyze the impact on the market and the financial industry, we need to look at the facts in the article. In September, 21.4 percent of construction companies were affected by canceled housing projects, a record high since the survey began in 2012. This shows that many projects are no longer economically feasible due to increased costs and higher interest rates. The construction industry is therefore demanding that the government improve the framework conditions for affordable housing construction. A reduction in interest rates and lower rents are mentioned as possible solutions.

Current developments in housing are worrying as they not only impact the construction industry, but also the real estate market and the economy as a whole. If fewer new apartments are built, demand for existing apartments increases, which can lead to higher rental prices. This, in turn, can affect consumer purchasing power and inhibit economic development.

The construction industry is calling on the government to act quickly and take measures to boost housing construction. If the government does not respond in a timely manner, this could lead to further cancellations of construction projects and further destabilize the housing market. In addition, project developers have already gone bankrupt, which could lead to further economic uncertainty.

It is important that the government takes the construction industry's suggestions seriously and takes effective measures to promote housing construction. This could include, among other things, simplifying building permit procedures, reducing construction costs and creating financial incentives for investors.

The current housing crisis is not a new phenomenon and has already been predicted by experts. The previous government could have taken measures to address this. Proposals for reforms and simplifications are already available. It is now up to the current government to act quickly and support housing construction in Germany in order to minimize the economic impact and create the urgently needed new housing.

Source: According to a report from www.fr.de