The rise in construction prices has left the exceptional peak of 2022 and 2023 behind and is approaching average values again. The situation is different for building permits: They continue to collapse.
Prices for new conventionally constructed residential buildings in Germany rose by 2.8 per cent in February 2024 compared to February 2023. In November 2023, the previous reporting month for the statistics, prices had risen by 4.3 per cent year-on-year. In the second quarter of 2022, the year-on-year increase in construction prices had reached an unprecedented high of 17.6 per cent. Prices for maintenance work on residential buildings (excluding cosmetic repairs) were 5.1 per cent higher in February 2024 than in the same month of the previous year.
The trend in building permits for new construction is different. From January to February 2024, the Federal Statistical Office recorded a year-on-year decline of 35.1 per cent for single-family homes, 15.4 per cent for two-family homes and 21.5 per cent for multi-family homes.
The low number of building permits is a growing concern for many market observers. The number of missing flats is already in the hundreds of thousands. This is making it difficult to find accommodation in many large cities. For some time now, families with children in particular have been moving to the outskirts of cities or even the countryside in search of sufficiently large and affordable living space.
In the view of the property industry, the collapse in the number of building permits is a major challenge for policymakers in Germany. "Housing construction is in a downward spiral. It can't go on like this! This downward spiral must be stopped at all costs," commented ZIA President Dr Andreas Mattner on the figures from Wiesbaden. According to the ZIA analysis, there is currently a new construction gap of 600,000 flats. Without countermeasures, it will grow to up to 830,000 flats by 2027.
(Graphic: © Destatis, 2024)
