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Housing Market: Germany: Difference between revisions
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An alliance of tenants' association and construction union as well as social and industry associations has called on the federal and state governments to raise 50 billion euros for the social housing market by 2025.This is the only way to achieve the federal government 's goal of creating 400,000 social housing units in this election period , explained the alliance in Berlin.<ref>https://www.zdf.de/nachrichten/wirtschaft/wohnungsmarkt-mieterbund-100.html</ref> | An alliance of tenants' association and construction union as well as social and industry associations has called on the federal and state governments to raise 50 billion euros for the social housing market by 2025.This is the only way to achieve the federal government 's goal of creating 400,000 social housing units in this election period , explained the alliance in Berlin.<ref>https://www.zdf.de/nachrichten/wirtschaft/wohnungsmarkt-mieterbund-100.html</ref> | ||
==== Building Permits Federal Statistical Office ==== | ==== <big>Building Permits Federal Statistical Office</big> ==== | ||
''The number of building permits allows an early assessment of future construction activity.'' | ''The number of building permits allows an early assessment of future construction activity.'' | ||
[[File:Genehmigte-wohnungen-monat.png|center|thumb|775x775px|https://www.destatis.de/DE/Presse/Pressemitteilungen/2024/02/PD24_074_3111.html#:~:text=11%20000%20Bauantr%C3%A4ge.-,Starke%20R%C3%BCckg%C3%A4nge%20bei%20Ein%2D%20und%20Zweifamilienh%C3%A4usern,300%20Wohnungen)%20besonders%20stark%20zur%C3%BCck.]] | [[File:Genehmigte-wohnungen-monat.png|center|thumb|775x775px|https://www.destatis.de/DE/Presse/Pressemitteilungen/2024/02/PD24_074_3111.html#:~:text=11%20000%20Bauantr%C3%A4ge.-,Starke%20R%C3%BCckg%C3%A4nge%20bei%20Ein%2D%20und%20Zweifamilienh%C3%A4usern,300%20Wohnungen)%20besonders%20stark%20zur%C3%BCck.]] | ||
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* Around two thirds of new apartments in Germany are being built in apartment buildings, which are predominantly built by companies. Here the number of building permits fell by 25.1% or 47,800 to 142,600 apartments. | * Around two thirds of new apartments in Germany are being built in apartment buildings, which are predominantly built by companies. Here the number of building permits fell by 25.1% or 47,800 to 142,600 apartments. | ||
==== Construction completions ==== | ==== <big>Construction completions</big> ==== | ||
==== | ==== <big>Forecasts</big> ==== | ||
By 2026, Europe will have finished building only about 1.5 million housing units (down 13% on 2023). '''For Germany, that means an expected decline of 35%. <ref>https://www.ifo.de/en/press-release/2024-02-20/european-residential-construction-pushes-sector-red</ref>'''<blockquote>“Due in particular to the sharp rise in construction and financing costs, it’s often no longer possible to build new homes in Germany. Politicians haven’t yet made a decisive improvement to the policy framework,” says ifo construction expert Ludwig Dorffmeister. “The resulting decline in the number of permits doesn’t bode well for the coming years.””</blockquote> | By 2026, Europe will have finished building only about 1.5 million housing units (down 13% on 2023). '''For Germany, that means an expected decline of 35%. <ref>https://www.ifo.de/en/press-release/2024-02-20/european-residential-construction-pushes-sector-red</ref>'''<blockquote>“Due in particular to the sharp rise in construction and financing costs, it’s often no longer possible to build new homes in Germany. Politicians haven’t yet made a decisive improvement to the policy framework,” says ifo construction expert Ludwig Dorffmeister. “The resulting decline in the number of permits doesn’t bode well for the coming years.””</blockquote>'''PNB Paribas''' | ||
[[File:Screenshot 2024-03-29 082736.png|center|thumb|436x436px|https://www.realestate.bnpparibas.de/sites/default/files/document/2024-03/bnppre-institutional-report-germany-2024.pdf]] | |||
The significant decline in the number of building permits issued indicates a slowdown in residential construction until at least 2027. | |||
* We expect to see a significant drop in the number of residential building permits (260,000) and completions (240,000) in 2023 (final figures were not available at the time of this report). According to our calculations, the number of building permits is likely to drop further to around 200,000 residential units as of 2024. | |||
* Building completions will respond with a delay. Based on the number of building permits issued, we expect to see a decline in completions from around 200,000 (2024) to 160,000 (2026) before the market stabilises again. It is unlikely that the federal government’s target of 400,000 completed units per year will be met. | |||
[[File:Screenshot 2024-03-29 082755.png|center|thumb|445x445px|https://www.realestate.bnpparibas.de/sites/default/files/document/2024-03/bnppre-institutional-report-germany-2024.pdf]] | |||
* The Pestel Institute anticipates an annual need for '''new construction of between 360,000 and 410,000 units based on the current deficit and the need to replace obsolete properties.''' Based on estimated completion figures, this means that only 59% of demand for new housing will be met in 2023. This share is likely to fall to 44% by 2027 due to the drop in completion numbers. | |||
* This data does not take into account pent-up demand from 2023. For 2022/2023, the current construction deficit is estimated at around between 350,000 (ZIA) and 700,000 units (Pestel Institute). When we add this to the projected annual shortfall in new construction, the construction '''deficit could grow to over 1 million units by 2027''' | |||
=== <big>Demand</big> === | === <big>Demand</big> === | ||