BERLIN (Reuters) – Germany, lagging in its building goals to alleviate a housing shortage, needs to construct 320,000 new apartments each year by 2030, a study on Thursday showed.
Authorities granted permits for the building of just under 216,000 apartments in 2024, as Europe’s largest economy navigates its worst real-estate crisis in decades, keeping a lid on new construction.
That pace, the slowest since 2010, puts Germany far behind the federal government’s self-imposed goal of building 400,000 apartments a year to help house its growing population, spurred in part by immigrants from Ukraine and Syria.
The study – by the Federal Institute for Research on Building, Urban Affairs, and Spacial Development (BBSR) – was commissioned by the nation’s housing ministry.
It showed the need for housing was particularly great in cities like Berlin, Munich and Frankfurt.
After years of boom, Germany’s 730 billion euro real estate industry ground to a halt in 2022 when the European Central Bank swiftly hiked interest rates to stamp out the worst bout of inflation in decades.
The industry, which had been firing on all cylinders, was ill-prepared. Construction projects halted, workers lost their jobs, building sales collapsed and property developers went insolvent.
Industry executives had hoped for a recovery in the sector this year but a recent increase in borrowing costs – on the back of spending plans by the German government – is dealing yet another blow.
(Reporting by Christian Kraemer; writing by Tom Sims; Editing by Tomasz Janowski)
