Kommt der Bau aus der Krise?: Baugenehmigungen steigen - Bundesbaugesellschaft vor Start

Germany's construction industry is experiencing a surge as building permits continue to rise, signaling progress in the battle against housing shortages and rising rents. In August alone, authorities approved the approval of 20,600 new apartments, a 6.8% increase, or 1,300 more than the previous year. This positive trend follows the strong 15% rise in first half of the year, the largest since 2016. The approvals provide a key indicator for addressing housing shortages and climbing rents.

Bundesbauministerin Verena Hubertz announced plans for a state-owned housing construction company to boost new builds, aiming for a launch in 2027. "We will present our concept in the fall and get started as quickly as possible," Hubertz told the t-online portal.

From January to August, 169,400 permits were issued for 169,400 apartments in new and existing buildings, a 12% increase over the same period last year. In newly constructed buildings, 137,500 apartments were approved, a 12.7% rise. Single-family homes saw nearly an 8% increase in permits, while two-family homes posted a 21.7% jump, the most common type of development. Four-family homes saw a 14.5% increase in permits compared to the previous year.

However, higher borrowing costs due to rising material and energy prices, driven by the Iran war, and the 10-year construction loan rate surpassing 4% due to inflationary concerns, may slow the momentum of this growth. Ifo Institute data from September indicated a slight downturn in sentiment within the construction sector, with construction firms becoming more cautious about upcoming months.

Klaus Wohlrabe, head of Ifo surveys, noted that rising financing costs and potential European Central Bank rate hikes are weighing on the industry.

Bundesbaugesellschaft, a state-owned housing construction company, aims to counteract the crisis in construction, a major challenge for the German government. The coalition government under Hubertz and Finance Minister Lars Klingbeil (SPD) has struggled to make headway in this area. Hubertz emphasized the importance of a lean structure, not a new building company, and the potential for better pricing and lower interest rates through partnerships and leveraging the AAA credit rating.

With a AAA rating, investors receive favorable conditions, which could be crucial for construction investments heavily dependent on interest rates. Germany is estimated to be short of over a million affordable housing units, with just 206,600 completed last year, the lowest number since 2012. The government intends to expedite construction through a "construction turbo" and faster approval processes for energy-efficient homes, continuing support for builders until the end of the year.

Despite the promising trend in building permits, the ultimate goal remains the completion of these projects.