Hardly any new flats, little in planning, much delayed

The statistical curve for housing construction looks quite comfortable. But the deviation from the political target of 400,000 new dwellings per year is quite glaring. Last year, not even 300,000 flats were completed. Project developments are in crisis. Housing projects are significantly affected.

According to the Federal Statistical Office, 295,000 new flats were completed in 2022, which was still 1,900 flats or 0.6 percent more than in the previous year. Specifically, 1.5 percent fewer single-family houses were built, but 14.1 percent more two-family houses and 1.5 percent more multi-family houses.

Thus, after a decline in 2021 (293,400 dwellings), the number of completed dwellings increased slightly again after the number of new dwellings had risen steadily in the years 2011 to 2020. However, the level of 2020 (306,400 dwellings) was not reached in 2022. The figures include both construction completions for new buildings and for construction measures on existing buildings.

It is not without reason that the federal government is pursuing the goal of creating 400,000 new flats in Germany every year. The housing markets in the big cities have been tight for years. The large influx of immigrants into the cities has exacerbated the problem. This should actually be counteracted by strong housing construction.

However, the current building permit figures for 2023 point drastically in the other direction: building permits for flats fell by almost 30 percent in March 2023 compared to the same month last year. This sheds a harsh light on the development to be expected in the future. In addition, the average duration between the building application for residential buildings and completion has increased by two months since 2020.

The figures of the independent consulting and analysis institute bulwiengesa point in the same direction: the classic project developers are withdrawing. The total project development volume of the seven German A-cities is shrinking. Residential project developments are significantly affected by the decline with minus 7.4 percent or 1.6 million square metres.

(Graphic: © Statistisches Bundesamt, 2023)