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New Government Action Plan Targets High Construction Costs
The German Federal Ministry for Housing, Urban Development and Building, led by Minister Verena Hubertz, has introduced a comprehensive “Action Plan to Reduce Construction Costs” aimed at making building more affordable across Germany. High construction expenses have been identified as a key obstacle to sufficient housing development, and the initiative focuses on both short- and medium-term measures to tackle this challenge. The announcement was made in mid-2026 and follows earlier efforts to expedite and upgrade building processes, collectively designed to unlock more housing supply [Source 1], [Seed Article].
Key Measures to Accelerate and Simplify Building
The action plan outlines a multi-faceted approach that includes streamlining standards by removing unnecessary regulations through the new “Gebäudetyp-E-Gesetz” (building type law). It also promotes digitalization efforts, such as mandating digital submissions of construction applications starting in 2028 to enhance efficiency. Modular and serial construction methods are incentivized to reduce costs and increase speed. Additionally, the plan utilizes programs like “Gewerbe zu Wohnen” that convert vacant commercial properties into residential units, thus expanding housing options without the need for new ground-up construction [Source 2], [Source 4], [Source 5], [Source 6].
Implications for Expats and Foreign Residents in Germany
For expats, international students, and foreign workers residing in Germany, the action plan could lead to more affordable housing availability in the medium to long term, potentially easing the challenges of finding adequate accommodation in high-demand urban areas. The streamlined building regulations and faster permitting processes may also mean more rental and purchase opportunities arise faster. However, these changes do not immediately alter rent controls or tenant rights but signal an intent by the government to increase housing supply sustainably. Foreign residents planning to buy property or move into new housing developments should monitor upcoming regulatory changes, especially the transition to digital construction application processes which may affect timelines and bureaucratic requirements starting 2028 [Source 3], [Source 6].
The action plan comes amid considerable cost pressures exacerbated by global factors, such as the Iran conflict affecting supply chains and construction material prices. Despite this, construction costs have shown signs of a 10% decrease, indicating early positive impacts of government efforts. The plan forms part of a broader government agenda, including a recent upgrade of the Baugesetzbuch (building code) and support measures for municipalities to foster livable, affordable communities [Source 4], [Source 8], [Seed Article].
More information on the action plan can be found at the original announcement here: https://www.tagesschau.de/inland/innenpolitik/aktionsplan-baukosten-100.html [Seed Article].
