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Real estate: Number of newly built apartments slightly decreased

Real estate: Number of newly built apartments slightly decreased

Many people are looking for affordable housing, especially in cities. However, the number of completions is well below the target originally set by the federal government.

Despite the high demand, housing construction in Germany did not pick up last year, especially in urban areas. However, the result was better than feared, with 294,400 completed apartments.

According to the Federal Statistical Office, the number of apartments built fell by 0.3 percent compared to the previous year. The number of completions has hardly changed since 2021. The federal government’s original target of 400,000 new apartments per year was clearly missed. However, a decline to 215,000 to 270,000 apartments had been feared.

Construction projects have become much more expensive over the past two years due to the sharp rise in loan interest rates and construction costs. As a result, many projects, particularly in residential construction, have been postponed or cancelled. The industry is complaining about a lack of new orders and cancellations of projects that have already been planned.

Many of the completions last year are likely to be due to permits that were applied for and granted in the years up to 2022 under much better conditions, explained the German Construction Industry Association. “The bottom line, however, remains that fewer apartments were built last year than the need for affordable housing actually requires,” said Managing Director Tim-Oliver Müller.

Fewer building permits

Building permits have also been declining for months. The construction industry association recently assumed that only 220,000 to 230,000 apartments would be completed this year. Associations in the construction and real estate industry are calling for more state funding in view of the housing shortage, particularly in urban areas.

The leading association of the real estate industry ZIA estimates the gap in new construction in Germany at 600,000 apartments and warned that without corrections this figure could rise to up to 830,000 apartments in 2027.

Many construction projects stalled last year. One reason may be the shortage of skilled workers. The statisticians explained that the time from approval to completion for residential buildings completed in 2023 was further extended to 24 months.

The figures include both construction completions for new buildings and construction work on existing buildings. 257,200 were new apartments. Of these, 69,900 apartments (minus 9.3 percent) were single-family homes. The number of new apartments in two-family houses, however, rose by 3.8 percent to 23,800. 156,300 new apartments were created in multi-family buildings, 4.1 percent or 6,100 more than in the previous year.

Source: Stern

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