The downward trend in building permits accelerated again in September. 15,300 new apartments were approved, 23.1 percent less than in the same month last year, as announced by the Federal Statistical Office in Wiesbaden on Monday. In August, the decline compared to the previous year was much weaker at 6.8 percent. In the year to date, the decline is now 19.7 percent.
According to statisticians, the number of building permits for single-family homes fell the most in the first nine months, falling 25.7 percent. The number of houses approved for two-family houses fell by 13.0 percent. As for the largest building type in terms of numbers, apartment buildings, the number of dwellings approved by the end of September fell sharply by 21.7 percent to 82,400.
The number of building permits in Germany has been declining month after month for about two years – mostly by a double-digit percentage range. The reason is rising construction costs and high interest rates. In August, 6.8 percent fewer dwellings were approved (18,300), leading to hope that the trend will turn around in the future.
“Signs of stability from previous months have been misleading,” explained the scientific director of the Institute for Macroeconomics and Business Cycle Research (IMK) of the Hans Böckler Foundation, Sebastien Dullien. “We have not yet reached the bottom.”
Tim-Oliver Müller, General Manager of the Main Association of the German Construction Industry, praised the “wealth of measures to stimulate the house building industry” launched by the federal government. However, this has so far “remained insufficiently effective”. In the end, it’s not just about state funding, but about “late radical cuts in federal, state and local government standards and requirements that are impeding and driving up construction costs.
As a result of the new figures, “we are looking at the coming months without a budget with great concern,” explained Felix Pakleppa, general manager of the Association of the Central German Construction Industry. “Germany is facing temporary budget management. This means that until a new budget is approved, not only can the state not award any new contracts for roads and railways, but funding for building new in danger of running out.”
“The federal government leaves a heavy burden on the new government,” explained IMK head Dullien. “Until now, however, the opposition has not made any proposals as to how the housing shortage in Germany could be reduced effectively and quickly. “
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2024-11-18 15:41:00
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What are the main economic consequences of the decline in building permits in Germany as discussed in the interview with Dr. Dullien and Tim-Oliver Müller?
As the website editor for world-today-news.com, I am pleased to present a comprehensive interview with two industry experts about the recent decline in building permits in Germany. Our first guest is Dr. Sebastien Dullien, the scientific director of the Institute for Macroeconomics and Business Cycle Research at the Hans Böckler Foundation. Our second guest is Tim-Oliver Müller, the general manager of the Main Association of the German Construction Industry.
Section 1: Understanding the Causes of the Decline in Building Permits
Host: Good morning, Dr. Dullien. Can you provide us with your insights into the primary reasons behind the persistent decline in building permits in Germany?
Dr. Dullien: Yes, of course. The decline in building permits in Germany can be attributed to several factors, including rising construction costs and high interest rates. The increasing costs of materials, labor, and land are making it more difficult for developers to finance new projects. In addition, the COVID-19 pandemic has disrupted supply chains and delayed the availability of certain materials. The high interest rates, caused by the European Central Bank’s monetary policy, are also making it more expensive for builders to secure financing. As a result, many projects have been put on hold until market conditions improve.
Host: Thank you for that perspective, Dr. Dullien. Tim-Oliver, what about you? Do you agree with these factors, or do you see anything else at play here?
Tim-Oliver: I would agree with Dr. Dullien’s assessment but also emphasize that there are other challenges facing the construction industry, particularly regulatory barriers at the federal, state, and local levels. These can include excessive bureaucracy, complicated permit processes, and onerous environmental standards that make it difficult for developers to get projects off the ground. The government has taken some steps to address these issues, but more needs to be done to streamline the process and reduce costs.
Section 2: The Impact of the Decline in Building Permits on the Economy and Housing Market
Host: The decline in building permits has serious implications for the economy and housing market. Dr. Dullien, can you please elaborate on these
