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Germany Housing Construction Declines to 15-Year Low
The number of new housing units built in Germany is projected to continue falling, reaching the lowest level in 15 years by 2026. The Munich-based ifo Institute forecasts only 185,000 new dwellings will be completed in 2026, down from 207,000 units in 2025—the lowest since 2012. Although a slight increase to approximately 210,000 new homes is expected by 2028, this still represents a slow recovery after several years of decline. The decline follows a broader European trend but is notably slower compared to other countries like Spain, France, and the UK, where housing construction is expected to expand more robustly in the coming years [Source 1][Source 4][Source 7][Source 8].
Factors Slowing Housing Construction Recovery
The ifo Institute attributes the sluggish rebound in Germany’s housing construction to several factors. The time between building permits and project completion has increased significantly, now averaging around 27 months, adding delays to new housing availability. Additionally, soaring construction costs driven by rising prices for building materials and labor have made new housing development more expensive. Global challenges such as the ongoing Iran crisis have further pressured construction inflation, complicating conditions for both developers and private home builders. These difficulties contribute to a residential construction market struggling to respond to Germany’s acute housing shortage [Source 1][Source 4][Source 8].
Implications for Expats and Foreign Residents
For expats, international students, and foreign workers living in Germany, the ongoing housing construction slump could exacerbate challenges in finding affordable accommodation. With fewer new apartments entering the market and building costs high, rental prices are likely to remain elevated, particularly in urban centers where demand is strongest. This situation could increase rental expenses and competition for housing, making it more difficult to secure suitable living arrangements. Expats should therefore prepare for potentially higher housing costs and consider earlier planning for rental contracts. Awareness of the extended construction timelines may also help manage expectations regarding housing availability in the near future [Source 1][Source 4].
Expats seeking longer-term housing stability may want to explore options such as employer-assisted housing or sharing accommodations to mitigate financial impact. Staying informed about local housing regulations and tenant rights remains crucial, especially as the limited supply tightens the rental market. Additionally, international students should consult university housing offices early during their admission process to increase their chances of securing campus-affiliated or affordable housing alternatives. Overall, the slow recovery in Germany’s housing construction sector represents a tangible challenge with practical implications for those relocating or residing in the country [Source 4][Source 7].
For further reading, see the original report by tagesschau.de: Wohnungsbau in Deutschland fällt auf 15-Jahrestief [Source 4].
