German Home Approvals Extend Their Rise, but Builders Face Cost Pressures
August approvals increased year over year, while industry representatives said the total remains well below 2021 levels and financing costs weigh on builders.
Key takeaways
- Germany approved 20,600 new homes in August, up 6.8% from a year earlier.
- Approvals in the first eight months rose 12.1% year over year.
- An industry leader said the January-to-August total was still about a third below 2021.
Germany approved 20,600 new homes in August, up 6.8% from the same month last year, according to the Federal Statistical Office. The increase extended a broader recovery in housing approvals.
In the first eight months of the year, authorities approved 169,400 homes, 12.1% more than in the same period last year. The first-half increase was just over 15%, the strongest rise for that period since 2016, Tagesschau reported.
Multifamily housing led the gains. Through August, approvals covered 90,600 new apartments in multifamily buildings, up 14.5% year over year. Authorities also approved 31,500 new single-family homes, a 7.8% increase.
Felix Pakleppa, head of the Central Association of German Construction Industry, said the total remained about a third below the January-to-August figure for 2021. He cautioned that approved homes are not necessarily built, and said financing costs have kept many projects on hold.
The Ifo Institute reported that its business-climate gauge for residential construction fell to minus 25.1 points in September, from minus 22.5 in August. Higher interest rates and energy prices are adding pressure on builders despite the rise in approvals.
This article was produced with the help of AI technology. Based on reporting by the outlets listed above.
