New apartment construction in Germany has collapsed since 2024, new data show.
Higher interest rates and higher construction costs were behind the collapse.
Only 251,900 new flats were built in 2024 –a decline of more than 14 per cent compared to 2023, the Federal Statistical Office reported May 23.
It is the first significant decline since new builds reached an all-time high of 306,400 units in 2020.
Between 2021 and 2023, a slightly lower 294,000 apartments were completed each year.
The low mark came in 2009, when only 159,000 units were finished.
The number includes apartments in newly constructed buildings, but also new flats in previously existing buildings, such as when office blocks are converted into residential buildings.
The decline was most pronounced for single-family and duplex houses, which fell by 22 and 26 per cent respectively.
Single-family and duplex houses are predominantly built by individuals rather than commercial investors.
Price inflation and economic stagnation are therefore placing the largest burden on individual homeowners in the private sector.
The average time from applying for a permit to building completion increased further to 26 months, up from 20 months in 2020.
This collapse in new build adds to fears of a worsening housing shortage in Germany.
There is already a shortfall of hundreds of thousands of apartments in the country, especially acute in the bigger cities.
The former left-wing Social Democrat, Green Party, and Liberal coalition government aimed to have 400,000 new apartments built per year, but had failed to achieve this goal.
In January 2025, the number of new building permits had fallen to a 14-year-low, the Federal Statistical Office reported.
On May 15, the new construction minister Verena Hubertz (SPD) announced a “construction turbo” for her first 100 days in office to help German municipalities fast-track building projects.
Pundits are sceptical. Writing in Die Welt, journalist Michael Fabricius bemoaned Hubertz lacking the necessary experience for her position.
Hubertz is also a proponent of Germany’s rent control system, which the new government coalition has vowed to uphold.
Experts, though, suggest the country’s strict rental laws are to blame for the German housing shortage.
A 2024 study by the Institute of the German Economy in Cologne showed that rent controls had greatly reduced the supply of rental apartments.
