According to official figures released on Thursday, housing construction in Germany once again failed to gain momentum last year despite high demand, especially in urban centres.
The number of completed apartments fell by 0.3% compared to the previous year, the Federal Statistical Office reported, amounting to a total of 294,400 homes built.
This was a smaller drop than feared, but was still far from the centre-left government’s target of building 400,000 new homes per year.
The number of homes delivered per year has hardly changed since 2021.
Housing Minister Klara Geywitz described the construction situation as stable. “In addition to the 294,400 completed apartments, there are currently another 390,900 apartments under construction.”
In addition, there is a significant increase in approvals for social housing construction in 2023, she said. According to the minister, the number of social homes has increased by more than 20% to a total of 49,430.
Construction projects have become much more expensive in the past two years due to the sharp increase in interest rates on loans and construction costs. As a result, many projects have been postponed or canceled, especially in residential construction.
The sector complains about a lack of new orders and cancellations of already planned projects.
Many of last year’s deliveries can probably be attributed to permits that were applied for and granted under much better conditions in the years up to 2022, the German Construction Industry Federation explains.
“However, the bottom line is that fewer homes were built in the past year than the demand for affordable housing actually requires,” says the federation’s general director, Tim-Oliver Müller.
