Building permits rise - Uptrend in owner-occupied homes - Germany's Residential Construction Permits Surge 5.7% in August 2023
Germany witnessed a surge in residential construction permits in August 2023, with a total of 19,300 units approved, marking a 5.7% increase from the previous year. This trend, according to Sebastian Dullien, scientific director of the Institute for Macroeconomics and Conjuncture Research, signals an upward trend in the housing market.
From January to August 2023, a total of 151,200 residential units were approved, a 6.5% increase compared to the same period last year. This growth is particularly notable in the single-family home sector, with permits increasing by more than 15% to 29,300. Multi-family homes also saw a rise, with 79,100 new units approved, a nearly 5% increase.
The construction industry is hopeful that state funding will boost infrastructure projects, which could help alleviate the housing shortage. However, the construction sector is currently grappling with high interest rates and construction costs, leading to a deep crisis. In 2022, only 251,900 residential units were completed, the lowest number since 2015, exacerbating the scarcity of affordable homes in urban areas. The federal government is attempting to accelerate housing construction with a 'construction turbo' through faster approvals.
The increase in building permits suggests a positive shift in the German housing market. However, the construction industry faces significant challenges that will need to be addressed to meet the growing demand for homes. The government's 'construction turbo' initiative aims to facilitate this process, but the success of this plan remains to be seen.
