Apartments in Germany are scarce. The traffic light government is making little progress with the new building, while the population is constantly growing. Now experts at Deutsche Bank are sounding the alarm: Germany is threatened with an unprecedented housing shortage. She expects a deep construction recession in 2023.
The housing shortage in Germany is still immense. Actually, the traffic light government promised that they would build 400,000 new apartments per year. According to estimates by the German Economic Institute, only 290,000 apartments were built by the summer.
Now top experts at Deutsche Bank are sounding the alarm: Germany is threatened with an unprecedented housing shortage. According to the paper Outlook Germany – New Global Realities, the “supply shortage will possibly be greater than ever before”. They expect that “only 246,000 new homes will be completed in 2023. The fatal thing: According to Deutsche Bank, the number of residents could increase to around 86 million people by 2030 – but new construction has plummeted.
This means that the rate of housing construction can hardly keep up with the rate of population growth. “For residential construction, we forecast a decrease in the number of building permits and completions in 2023,” according to experts at Deutsche Bank.
Deutsche Bank is certain that a deep construction recession is “inevitable”. In the paper, the experts explain: “The number of permits is likely to fall to 303,200 and we expect only 246,000 for the number of completed apartments.” Construction investments are likely to fall by a further 4.3 percent in 2023, according to Deutsche Bank.
Federal Building Minister Klara Geywitz admitted this week that the traffic light coalition will miss its target of 400,000 new apartments per year. Because of the increased interest on loans and high construction costs, many builders are holding back on projects or canceling them. According to the Ifo Institute, 16.7 percent of construction companies were affected by cancellations in November.