Regulation Application Rules to Be Specified Through Implementing Acts Decided by the Commission
The German government is taking steps to address the ongoing housing shortage, with key measures aimed at eliminating bureaucracy, creating an effective funding framework, and simplifying planning and approval procedures. However, despite high interest rates and construction costs, housing construction has yet to take off.
In the first half of 2025, the number of building permits for apartments in single-family houses increased by approximately 21,300 (+14.1%) compared to the previous year. The approval volume for apartments in multi-family houses, which constitutes the most important segment for housing the population, stabilized at around 57,300 apartments, a 0.1% increase from the previous year.
However, the expansion of housing construction, particularly in metropolitan areas, is hindered by the insufficiently available and expensive building land. This issue, coupled with a decrease of more than 40% in the construction of apartments in multi-family houses between 2021 and 2024, has contributed to the persistent housing shortage in these areas.
Tim-Oliver Müller, CEO of the BUILDING INDUSTRY, commented on the housing construction approval figures for June 2025, expressing concern over the ongoing housing shortage. He emphasized that everything that is not initiated in 2025 will have hardly any effect on the housing market in this legislative period.
In response, the federal government has announced a 'construction turbo' to accelerate the establishment of building plans in municipalities. The German Federal Minister responsible for housing (Bundesminister für Wohnen) has also been urged to present an action plan in the second half of 2025 to implement further projects from the coalition agreement to address the housing demand in Germany.
The housing shortage in metropolitan areas is a significant issue that requires urgent attention and action. The federal government's 'construction turbo' and the proposed measures aim to combat this issue by eliminating hindering regulation and bureaucracy, creating an effective funding framework, and simplifying planning and approval procedures.
The sale of building land in the seven A-cities decreased significantly from 2011 to 2024, with a drop from 5.850 million square meters in 2011 to around 1.633 million in 2024, which is about a quarter. The number of apartments in new and existing buildings was 110,000 in the first half of 2025, a 2.9% increase from the previous year.
In conclusion, addressing Germany's housing shortage requires a broad mix of measures. The federal government's initiatives, such as the 'construction turbo' and the proposed action plan, are steps in the right direction. However, urgent action is needed to ensure that the housing demand in Germany is met, particularly in metropolitan areas.
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