The decline in building permits continued rapidly at the beginning of the year. In January, 21,900 apartments were approved in Germany, a good quarter (26 percent) or 7700 permits less than in the same month last year. This was announced by the Federal Statistical Office on Friday in Wiesbaden. The figures include both building permits for dwellings in new buildings and for new dwellings in existing buildings.

In new residential buildings, 18,700 apartments were approved in January, a decrease of 28.5 percent within a year. Permits for single-family homes fell by a good quarter and for two-family homes by almost half. In the case of the largest type of building, multi-family buildings, the number of approved apartments shrank by almost 29 percent.

Building permits are an important indicator of the housing shortage in many cities. Despite the high demand for housing, the number of building permits fell by almost seven percent to 354,400 projects last year, the lowest level since 2018. Due to the sharp rise in lending rates and high construction prices, many builders are holding back on projects or cancelling them – from private house builders to large investors.

New mortgage lending business has also been shrinking for months, halving in January compared to the same month last year. Building Minister Klara Geywitz (SPD) has admitted that the traffic light coalition will miss the target of 400,000 new apartments per year.