Despite the decline in residential construction expected in the industry, the federal government intends to further reduce new construction subsidies from March.

Federal Building Minister Klara Geywitz (SPD) announced on Wednesday that there would only be low-interest loans for private individuals and investors building particularly climate-friendly houses, but no more grants.

Subsidies should only be received by local authorities if they build apartments, schools or kindergartens.

The federal government provides 750 million euros annually for the "climate-friendly new building" funding program.

From the summer, 350 million euros are to be added to promote home ownership for families.

Construction and real estate associations consider the funding to be too low.

The goal of 400,000 new apartments per year set by the traffic light government is therefore not achievable.

The total of 1.1 billion euros will be financed from the climate and transformation fund.

The subsidy is available if buildings are erected with the very high energy efficiency standard EH-40.

"We are issuing a program that is intended to have an effect, above all, through a reduction in interest rates," said Geywitz.

"And the whole thing is then supplemented in the summer by support for families with a low income who want to build a house, for example." In view of the rise in interest rates, many builders are concerned with financing.

A low-interest loan is then a great support.

Funding program does not solve dramatic problems

Geywitz has only been responsible for federal funding for efficient buildings (BEG) since the beginning of the year, which was previously part of the Ministry of Climate and Economic Affairs.

The previous funding program also provided for repayment grants to private individuals of up to 6,000 euros.

The program expires at the end of February.

Real estate and housing associations were disappointed.

"These 750 million euros do not even begin to solve the dramatic problems, and the consequences of further delays in a large surcharge will later cost a lot more money," said the President of the Central Real Estate Committee, Andreas Mattner.

The GdW central association of the housing industry explained: “With this funding, we will not be able to build 400,000 apartments in 2024 either.” The volume and the exclusive focus on the EH-40 standard are “not suitable for the affordable to make a difference in housing”.

The construction industry is seeing a significant decline in residential construction.

"The bitter truth is: The housing market has collapsed," said the general manager of the Association of the Construction Industry, Tim-Oliver Müller, about figures from the statistical office that real order intake in the main construction trades in November fell by a total of 5.6 percent compared to the previous month .

Sharply rising prices, higher credit costs and material shortages are causing problems for the industry.