Building in the crisis: low in new apartments – government wants to ignite Turbo

The new federal government is in the fight against housing shortage and rising rents before a Herculean task: the number of new apartments broke up by a good 14 percent last year. According to the Federal Statistical Office, 251,900 apartments were completed in Germany – 42,500 fewer than in the previous year. This has been a low since 2015.

The reason for the long -lasting doldrums on the construction are strongly increased interest rates and construction costs. Many house builders therefore refrained from their plans, investors held back – building was hardly worth it for them. According to experts, hundreds of thousands of apartments are missing in Germany. Chancellor Friedrich Merz (CDU) recently quantified the defect at “500,000 and more”.

The statisticians spoke of a first significant decline in the newly built apartments after the number had been around 294,000 each from 2021 to 2023. New single and two-family houses, which are mostly built by private individuals, were particularly downward.

New Minister of Construction: “Excavators have to roll again”

“There is too little and too slowly in Germany,” says the new Federal Minister of Building Verena Hubertz (SPD), who has announced a “housing turbo” for the first 100 days of her term. The approval procedures are too complicated and lengthy, construction costs too high and funding conditions too opaque.

It wants to accelerate approval processes, improve tax incentives, advance modern construction methods and enable the designation of more building land. “The excavators have to roll again and we have to build, build, build,” says Hubertz. “And that at affordable prices.”

Housing construction as a hardest test for politics

The previous government had failed on housing construction: the traffic light government had repeatedly missed its own goal of 400,000 new apartments every year. Previously, the number of new apartments from the low of 159,000 in 2009 had increased to 306,400 in 2020.

Since the lack of housing in the cities intensifies the construction of a doldrum, many experts continue to expect rental rents and real estate prices. According to the Kiel Institute for the World Economy (IFW), apartments and houses recently increased as strong as it has not been since mid -2022. And especially in cities, rents have been attracting a lot for years.

Rapid relief in the apartment crisis is not in sight. In 2024, building permits have fallen to the lowest level of almost 17 percent since 2010. At 215,300 they were significantly lower than the number of new apartments. As a result, the number of apartments that have already been approved, but not yet finished – to 759,700 apartments on the end of 2024. This “construction overhang” had to be exhausted, said Hubertz.

Housing construction takes longer and longer

One reason for the misery of building: the agonizing processes. Average in Germany 26 months from the approval to the finished new building, the statisticians write – six months more than 2020. In the past year, 29,000 building permits for apartments even expired, because this has usually expired several years of validity.

“The goal must be: more living space, fewer hurdles,” the real estate association ZIA demands and requires simpler building standards. The IG Bau is demanding a speed: “The new building turbo has to start now, not only tomorrow, and certainly not the day after,” says union leader Robert Feiger.

Building industry is slowly taking hope

The construction industry slowly sees improvement. The numbers are still catastrophic, said Peter Hübner, President of the main association of the German construction industry (HDB). However, the new business with real estate loans in 2024 increased significantly. “The positive trend continued at the beginning of 2025 and could be a first tentative sign that the valley sole in the new apartment is slowly reached.”

The Central Association of the Construction Trade (ZDB), on the other hand, even expects a further decline in a maximum of 230,000 new apartments for this year. Even in 2026 little will change because the number of permits for new apartments last year has dropped drastically. ZDB general managing director Felix Pakleppa says: “Only when the approval numbers rise again can the construction work to be attracted two years later.”

Large orders for civil engineering

After all, in March the construction industry received strong swing through several major projects for roads and railway lines. Compared to February, the price -adjusted value of the new orders in civil engineering rose by 34.3 percent – more than ever since reunification.