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New Measures to Lower Construction Costs in Germany
The Federal Ministry for Housing has introduced an “Action Plan to Reduce Building Costs” aimed at addressing the high expenses that hinder residential construction across Germany. This initiative follows prior efforts dubbed “Turbo” and “Upgrade,” which also sought to make building more affordable. The ministry presented the new plan on June 19, 2026, at an investor conference in Frankfurt am Main, emphasizing the need to accelerate project approvals and increase financial support for construction activities [Source 1].
Digitalization and Financial Incentives to Expedite Building
A central element of the plan is the digitalization of building permits, targeting a fully digital application and approval process by 2028. Exceptions for paper applications will be strictly limited to hardship cases. The digitalization aims to streamline procedures that have historically delayed construction projects, thus supporting faster realization of housing developments [Source 1][Source 8].
Additionally, the government intends to provide enhanced financial incentives to promote construction activity. Details on the exact mechanisms or funding amounts have not been fully disclosed but reflect a broader strategy to reduce the financial barriers for developers [Source 1].
Addressing Land Prices and Urban Development
While the plan focuses on permitting and funding, experts and commentators highlight that land prices remain a significant factor in overall construction costs. Calls for reforms to lower land prices, including expanded public transport infrastructure and increased building density, have emerged as complementary measures needed to improve affordability meaningfully [Source 4]. However, the official action plan as presented does not explicitly outline steps on land price reform [Source 1].
Implications for Expats and Foreign Workers
For expatriates, international students, and foreign workers residing in Germany, the new action plan may lead to increased availability of rental properties as more housing units come onto the market. The digitalization of building permits could result in faster urban development, potentially easing housing shortages typically felt by newcomers. However, those looking to develop property themselves should prepare for mandatory digital applications starting in 2028 and be aware of possible new financial assistance programs [Source 1][Source 8].
Overall, this government initiative focuses on reducing the cost barrier in construction, which indirectly benefits tenants by improving housing supply and potentially stabilizing rental costs in the long term. Expats should monitor developments closely, as accelerated approvals and increased construction activity could influence their housing options and affordability in major cities.
For more detailed coverage, visit the original report on tagesschau.de: Bauministerium legt “Aktionsplan zur Senkung der Baukosten” vor [Source 1].
