The housing shortage and subdued residential construction are currently much-discussed topics. Although the "construction turbo" announced by the federal government is still a long way off, there are initial positive signs. Building in existing structures is gaining in importance.
The mood in residential construction has improved noticeably. The ifo business climate index rose from minus 25.8 to minus 23.5 points in July. Companies were less sceptical about the future in particular, and their assessment of the current situation brightened slightly. "Companies in the residential construction sector are cautiously hopeful," says Klaus Wohlrabe, head of ifo surveys. "However, we are still a long way from optimism – although the situation has eased somewhat, dissatisfaction remains high."
The proportion of companies with a shortage of orders fell from 47.9 to 46.1 per cent. This is the lowest figure since August 2022. "We are heading in the right direction, but residential construction needs more than political announcements," says Wohlrabe. "The recovery can only continue if the residential construction turbo actually kicks in." A sustainable improvement will also depend on how financing costs develop.
Another encouraging fact is that renovation is gaining in importance. This is shown by the current Greyfield Index, a key figure that compares renovation and conversion measures to new construction. According to this index, around 182,000 new construction projects will be recorded nationwide in 2025, representing a decline of around 22 per cent compared to 2024 (234,000). This contrasts with 136,000 construction activities in existing buildings, the number of which declined only slightly (minus six per cent) compared to the previous year (145,000). Around 450 building permits are issued every day in Germany, or about one every three minutes. Almost half of these now relate to existing buildings.
The construction and real estate industry is undergoing structural change. Resource scarcity, climate protection and changing social needs are making it necessary to transform existing buildings. Against this backdrop, young people today are buying old properties in order to revitalise them.
Photo: © Udo Voigt, Pixabay
