Despite the housing shortage in Germany, the decline in housing construction continues unabated. The authorities approved the construction of 22,300 apartments in February. According to the Federal Statistical Office, that was a drop of 20.6 percent compared to the same month last year. Felix Pakleppa, general manager of the German construction industry, warned on Tuesday of a downward spiral in construction. The numbers are “dark omens for the housing construction that is so urgently needed in this country.”

Because of the sharp rise in interest rates on loans and high construction costs, many builders are holding back on projects or canceling them – from private house builders to large investors. Industry representatives also complain about long waiting times for building permits. Pakleppa called for a realignment of the federal government’s funding policy. “We will miss all the apartments that are not approved today tomorrow,” he warned.

According to the Central Association of the German Construction Industry, the reduction in bureaucracy could also trigger a boost: “Because 16 different state building codes are slowing down a broad-based housing offensive,” said Managing Director Tim Oliver Müller. The German Real Estate Association warned that “keep it up” was not an option. Instead of ensuring that new buildings are built in line with demand, new hurdles are created in existing buildings, which dampens the willingness to invest.

Industry assumes 700,000 missing apartments

From January to February 2023, a total of 44,200 building permits were issued, 23.4 percent fewer than in the same period last year. The number of building permits has been falling since May last year. The Wiesbaden authority has recorded declines of more than 10 percent since October 2022.

A total of 37,500 apartments were approved for new residential buildings from January to February 2023, a decrease of 25.6 percent compared to the same period of the previous year. The number of building permits for single-family houses fell by 28.4 percent, and for two-family houses by more than half (52.4 percent). In the numerically largest type of building, multi-family houses, the number of approved apartments fell by 23.0 percent.

Building permits are an important indicator of the housing shortage in many cities. Representatives of the construction industry also complain about long waiting times for building permits. The processing of a building application today takes twice as long as the building itself, criticized the President of the Federal Chamber of Engineers, Heinrich Bökamp, ​​at the beginning of the week at the international building trade fair in Munich. “This is a mega topic for us,” said construction industry president Peter Hübner. Federal Building Minister Klara Geywitz (SPD) promised a remedy through more digitization.

According to industry estimates, there is a shortage of around 700,000 apartments nationwide. Geywitz has admitted that the traffic light coalition will miss the target of 400,000 new apartments per year.