German Housing Construction Faces Persistent Challenges as Costs Rise

Over half of housing construction firms report order shortages, while rising prices and structural issues hinder recovery efforts.

Overview

53.6% of German housing construction firms reported a lack of orders in December 2024, reflecting ongoing struggles in the sector.
The Ifo Institute highlights structural issues and limited effectiveness of current government measures in addressing the housing crisis.
Housing construction costs rose by 3.1% in November 2024 compared to the previous year, with notable increases in heating systems and other building materials.
The DIW recommends a targeted federal program to support social housing in areas with tight markets, alongside accelerated legal frameworks for implementation.
Despite slight improvements in business sentiment, the housing construction sector's output is projected to remain 25% below 2021 levels by 2026.