Germany’s residential construction falls to 13-years low

Yesterday 12:15

Residential construction in Germany has fallen to its lowest level in 13 years, reflecting a sharp slowdown in the country’s housing sector amid rising costs and higher interest rates.

According to national statistics, the number of completed residential units dropped by 18% in 2025, reaching around 206,600 homes. This marks the lowest level since 2012 and continues a two-year downward trend in construction activity.

Experts say the decline is driven by increased building costs, stricter regulations, and higher financing expenses, all of which have made housing development more difficult. Industry analysts warn that construction in Germany has become overly complex and slow, contributing to the ongoing shortage of housing supply.

The economic think tank Ifo expects the number of completed housing units to fall further this year, highlighting continued pressure on the sector. Despite this, some indicators show early signs of stabilization, including a rise in building permits.

Government officials acknowledge the severity of the situation, describing the figures as concerning. However, they also note that state support for low-income housing has increased and that construction permits rose in early 2026, suggesting potential recovery in the medium term.

The housing slowdown has intensified debate over regulatory reforms and the need for policies to stimulate construction and address affordability challenges in Germany.