Real estate crisis: Number of building permits also fell significantly at the beginning of the year

Enlarge image

Village in Bavaria: demand increases, construction activity decreases

Photo: Bernd Feil / MiS / IMAGO

Building permits in Germany continued to fall in January 2024 after the significant decline last year.

The authorities approved the construction of 16,800 apartments, as the Federal Statistical Office announced on Monday in Wiesbaden.

That was 23.5 percent or 5,200 approvals fewer than a year earlier.

Compared to January 2022, the number even fell by 43.4 percent.

Builders are particularly concerned about the high interest rates on real estate loans and construction prices.

Many projects are being postponed or canceled, especially in housing construction.

Decline in all areas

Building permits are an important indicator with a view to the housing shortage, especially in cities.

The figures include both building permits for apartments in new buildings and renovations.

According to preliminary data from the authority, the number of permits fell to its lowest level in more than ten years last year despite strong demand for living space in many regions of Germany.

A total of 13,500 apartments were approved in newly built residential buildings in January 2024.

That was 27.7 percent less than in the same month last year.

The number of permits for single-family homes fell by 42.7 percent to 2,800.

In the case of two-family houses, there was a decline in the number of approved apartments by 19.6 percent to 1,100.

In the case of multi-family houses, the number of approved apartments fell by 20.0 percent to 9,200.

In contrast, in the first two months of this year, the number of real estate loan commitments to private customers rose slightly again for the first time, as financial intermediaries, the Schwäbisch Hall building society and the Bavarian savings banks report.

And according to figures from the Bundesbank, almost 14.7 billion euros of interest-linked private housing loans were granted in Germany in January, the highest value since March 2023.

However, the figure must be seen in the context of the sharp decline in credit demand following the rise in interest rates two years ago.

Shortly before, there had been a short-lived boom in anticipation of the impending interest rate increases because many home buyers wanted to secure the interest rates that were still low at the time.

mik/dpa