Building permits for apartments in Germany fell 27 per cent in 2023, the statistics office said, underscoring a downturn in demand in the construction and real estate industry and mirroring the general economy.
Some 260,100 permits were issued, 94,100 fewer than in 2022 and the lowest since 2012.
The number of building permits is an important indicator of future construction and many say the wider economy. The German national statistics office in mid-January said “multiple crises” affecting the economy had contributed to a 0.3 per cent fall in gross domestic product (GDP) in 2023.
The statistics office also said on February 29 high building costs and “difficult financing” were behind the decline in construction.
The real estate sector was a bedrock of Germany’s economy for years, accounting for about a fifth of output and one in 10 jobs. Fuelled by low interest rates, billions of euros were funnelled into property, which was viewed as a stable and safe and investment.
A sharp rise in interest rates has put an end to the run, tipping numerous developers into insolvency as deals freeze and prices fall. The number of people employed in the building sector has started to drop for the first time in a decade.
Germany has said it aims to build 400,000 apartments a year but its has been struggling to meet that goal for some time.
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