Further decrease in building permits

In 2023, the Federal Statistical Office (Destatis) reported an even sharper drop of 27% in the number of building permits. The decline slowed down over the course of last year. In the first half of 2024, the number of permitted housing units decreased by 21% year on year (-28,500 to 106,700 permits). In the second half of 2024, 12.5% fewer permits were issued (-15,600 to 109,300 units) compared to the same period last year.

In new construction, building permits were down by nearly a fifth. In 2024, 172,100 new housing units were approved (-20% or -41,500 compared to 2023). The single-family home segment saw a bigger decrease in the number of building permits (-20% or -9,600 to 37,900 units) than the two-family home segment (-11% or -1,600 to 12,700 units). Around two-thirds of the new housing units which were permitted in Germany in 2024 are part of multi-family homes. In this segment, the number of building permits fell by 20% compared to 2023 (-28,000 to 114,200 units). 

According to Felix Pakleppa, General Manager of the Central Association of the German Construction Industry, the dramatic decline over the past two years is blatant: “It is in stark contrast to the actual need for housing space, especially affordable housing. The federal government’s goals seem a long way off.” Pakleppa goes on to remark that the sharp drop in building permits is not only due to increases in prices and interest rates as a result of the war in Ukraine, but also to political mistakes. He calls for clear and reliable framework conditions to stimulate housing construction and close the supply gap.