Quarterly rise in residential construction permits
🇩🇪 Boom in Single-Family Home Building Permits in Germany
🏗️ The housing market in Germany is seeing a surge—a whopping 3.4% increase in building permits for apartments from the start of the year compared to last, with the number standing at 55,400. According to the Federal Statistical Office, this increase is primarily driven by the rise in single-family home permits.
💰 In the first quarter, a massive 15.3% increase in single-family homes was recorded, with 10,600 permits issued. However, the story isn't all rosy—there was a decrease of 8.9% in the number of permits issued for two-family homes, down to 3,000. As for multi-family homes, the number remained almost stagnant with a minuscule increase of 10 permits from the previous year, amounting to 28,800 apartments.
👷♂️ Industry experts attribute this growth to several factors, including increased purchasing power and falling interest rates. Sebastian Dullien, scientific director of the Institute for Macroeconomics and Business Cycle Research (IMK), predicts that this upward trend will continue, despite the recent slump due to rising interest and material costs.
🎯 But not everyone is optimistic. The main association of the German construction industry (HDB) issued a note of caution, citing the laborious process of implementing the economic package for housing construction stipulated in the coalition agreement. Tim-Oliver Müller, CEO of HDB, emphasized the need for prompt action to reap the benefits of this upward trend.
🔬 As for the future, experts at Deutsche Bank expect modest growth in housing construction in the current year. They forecast a rise in the number of completed apartments by 5,000 to 250,000, with stronger increases to 270,000 and 290,000 units in 2026 and 2027 respectively. The previous federal government had aimed for 400,000 units per year.
💔 A word of caution, though—the order situation remains challenging for housing construction companies, with 51.2% reporting a lack of orders as of April. Nonetheless, the mood among companies in the housing construction sector improved last month, with the business climate index climbing from minus 43 points in March to minus 37.7 points in April.
🤝 Looking ahead, efforts to address the housing shortage in Germany may gain traction from government policies, technological advancements, and a growing emphasis on sustainability. Despite the present challenges, predictions suggest a positive outlook for single-family home construction.
📝 Source: Reuters (edited by Christian Goetz). For further questions, please contact our editorial team at [email protected].
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finance: The growth in single-family home construction in Germany, as seen in the 15.3% increase in permits, could be an attractive investing opportunity for those interested in the real-estate sector.
investing: As the housing market in Germany continues to show a positive trend, with a surge in single-family home permits and predictions suggesting a continued upward trend, it may be worth considering investing in real-estate.
