FRANKFURT (Reuters) -Building permits for apartments in Germany
fell 31.5% in July from a year earlier, the statistics office
disclosed on Monday, highlighting a slump in demand plaguing the
construction and real estate industry.
The nosedive in permits comes amid calls from firms for stimulus
from Berlin to support the industry ahead of a meeting next week
with Chancellor Olaf Scholz.
The statistics office attributed the decline in demand to high
building costs and difficulties in getting financing, factors
that have deepened stress across the broader sector.
Authorities granted permits for the building of 21,000
apartments in July, 9,600 fewer than a year earlier. Permits
were down 28% for the first seven months of the year.
Germany aims to build 400,000 apartments a year, but has
struggled to meet the goal.
For years, low interest rates fuelled a global boom, igniting
interest in German property, seen as safe and stable as the
country. A sharp rise in rates put an end to the run, tipping a
string of developers into insolvency as deals froze and prices
Tim-Oliver Mueller, head of the German Construction Industry
Federation, is pushing for an emergency package of measures from
the government that includes a cut in property sales tax and
expansion of a low-interest rate credit program to support new
"The free fall in housing permits continues unabated. If the
federal government does not decisively turn the tide at next
week's housing summit... the housing shortage in Germany will be
cemented," he said in a statement.
Declines for single-family and two-family homes during the first
seven months of the year were even sharper, down 37% and 53%
from a year earlier.