At first glance, the building permit figures published today by the Federal Statistical Office (destatis) send a positive signal. After years of decline, the upward trend of recent times is consolidating. This May, 21,000 new and existing apartments were approved, 24.7 percent more than in the same month last year.
However, the German Real Estate Association IVD urgently warns against the fallacy that the crisis in residential construction is over. IVD President Dirk Wohltorf says:
"The upswing in residential construction remains theoretical. We are far from a recovery. Rather, the mood in the construction industry has deteriorated again. The current ifo business climate in residential construction shows falling expectations and a lack of orders. Instead of an upswing, we must assume that a new low in the number of apartments actually built will be reached this year.
The gap between approved projects and actually completed apartments is increasingly widening. More and more building permits remain in the drawer because investors and private builders do not find a reliable political framework. Due to government requirements and taxation, many housing construction projects are no longer economically feasible. The discussion about a possible socialization of housing stocks in Berlin is pushing investment confidence to a new low.
Some politicians do not seem to understand that investments in housing construction must be plannable in the long term. For example, the Building Modernisation Act once again missed the opportunity to create clarity beyond 2030 about the legal requirements for building energy supply and thus planning security. Landlords are now even being burdened financially. This is dampening the mood among market players.
A powerful impetus is now needed through a concerted action by the federal and state governments to initiate a real turnaround this year. One such impulse could be the "Pact for Property" announced by Construction Minister Verena Hubertz at the investor conference on June 19 in Frankfurt am Main. This must now be filled with life, such as a waiver of real estate transfer tax on the purchase of owner-occupied homes. Improved opportunities for home ownership have what it takes to boost housing construction on a broad front."
