"The new building is as good as dead", complains this construction entrepreneur - Germany’s Housing Crisis Worsens as Construction Costs Soar and Rules Strangle Growth
Germany’s housing crisis is deepening as construction slows and costs keep rising. In 2024, only 250,000 homes were built—far below the 400,000 needed each year. Industry leaders warn that without urgent changes, the situation will only get worse.
Construction costs have jumped by about 35% since 2021. The median price for new multi-family housing now stands at €4,500 per square metre. Thomas Reimann, president of the Hessian Association of Building Contractors, has called the current situation dire, stating that 'new construction is as good as dead' due to excessive regulations and high expenses.
Developers face thousands of rules, making affordable housing nearly impossible to build. Many fear lawsuits if they don’t meet the highest technical standards, even for minor details like concrete thickness. In Europe, intermediate floors often use 18 centimetres of concrete, but stricter German requirements push costs higher.
To speed up construction, Reimann has proposed reviving transitional and acceleration laws from the 1990s. Another idea, 'Building Type E,' aims to simplify standards and cut costs, but progress has stalled. Housing Minister Verena Hubertz has brought the proposal back, though it won’t take effect before summer 2027.
Forecasts show completions dropping further—just 235,000 homes are expected in 2025, with another decline likely in 2026.
Without faster reforms, Germany’s housing shortage will persist. The delay in introducing Building Type E means relief won’t come before 2027. Until then, high costs and strict rules will keep construction numbers well below what’s needed.
