German building authorities approved 19,300 new homes in September 2023, a 29.7% decrease from the same month in 2022, translating to 8,200 fewer building permits.
This is the lowest level of approvals since January and February 2013, according to data published by the Federal Statistical Office (Destatis).
The decline continued throughout the first nine months of 2023 with a 28.3% decrease in building permits for apartments compared to the same period in 2022. This resulted in 76,900 fewer building permits, bringing the overall number for 9M to 195,100.
As a result of these figures, the German government's goal of 400,000 new homes per year is far from being met.
The decline in approvals is due to high construction costs and unfavorable financing conditions.
New apartment approvals in newly constructed residential buildings declined by 31.7% in 9M 2023, while single-family homes and two-family homes saw decreases of 38.4% and 51.9%, respectively.
Multi-family homes, the most common type of apartment building, saw a decline of 27.2% in approvals, while dormitories were the only exception, with an 8.4% increase in approvals.
However, it is worth noting that the statistics do not include Lower Saxony as data was not available for September.
The construction industry has called for political measures to stimulate housing construction, such as a reduction in the real estate transfer tax and standardization of state building regulations, while investors are seeking a reduction in refinancing costs.