Too few new flats - new construction declining

There is a traffic jam in residential construction. While the number of building permits is declining, the number of construction backlogs, i.e. buildings that have been approved but not yet completed, is increasing. Material bottlenecks, higher interest rates and the threat of lower profitability have contributed to this. New flats are urgently needed to stabilise the market.

In August 2022, 28,180 dwellings were approved in Germany. As reported by the Federal Statistical Office, this was 9.4 percent less than in August 2021. From January to August 2022, a total of 244,605 building permits for flats were issued - this was 3.0 percent or 7,624 less than in the same period last year.

The number of building permits for single-family homes fell the most, by 15.8 percent. The expiry of the building subsidy for children in the previous year is noticeable here. For two-family houses, the number of approved flats fell by 2.8 percent from January to August 2022. For apartment buildings, the number of approved flats rose by 5.2 percent.

The "Affordable Housing Alliance" presented the measures for the construction, investment and innovation offensive on 12 October 2022 in Berlin under the leadership of Federal Chancellor Olaf Scholz and Federal Minister of Construction Klara Geywitz. 35 stakeholders, some with very different interests, agreed on a joint declaration. It contains 187 concrete measures that must be initiated and implemented by all participants. The goal: to quickly create affordable and climate-friendly housing. In Hamburg, the "Bündnis für das Wohnen in Hamburg" (Alliance for Housing in Hamburg) has already been setting standards for a socially acceptable housing policy since 2011 and can thus point to great successes.

Building and renovating is not a task that can be done overnight, says Klara Geywitz. "Building 400,000 flats a year, 100,000 of which are social housing, is more necessary than ever with increasing demand. It is therefore all the more important to make processes more effective and faster through digitalisation, type approval and serial construction, and to provide planning security through reliable funding."

A high level of new construction activity helps to stabilise the property market and keep price increases in check.

(Photo: © Federal Statistical Office, 2022)