The Federal Statistical Office of Germany has revealed that the number of apartments for construction in the country declined in the first half (H1) of 2023.
The office reported that 135,200 houses received construction approval in H1 2023, which represents a decrease of 27.2%, or 50,600 fewer permits compared to H1 2022.
The number of single-family house development permits declined by 35.4% or 14,800 to 27,000, while the number of permitted apartments for two-family houses also declined by 53.4% or 8,900 to 7,700.
A fall in demand, increasing construction costs, and challenging financing circumstances have amplified this drop in the construction industry, noted the office.
These findings include both construction permits for new residences and building permits for new houses in existing structures.
The decline in permits coincides with requests from domestic companies and politicians for Berlin to provide stimulus to the industry prior to a meeting with the country’s chancellor Olaf Scholz in September, reported Reuters.
German Construction Industry Federation head Tim-Oliver Mueller was quoted as saying: “The balance sheet for the first half of 2023 shows an incredibly bleak picture in residential construction.”
Consequently, several property developers in the country have declared bankruptcy in recent weeks, with the latest being Euroboden.
Real estate weakness has also surfaced in the US, Sweden, and China as of late, reported the media agency.