Germany is significantly behind its goal of constructing 400,000 new apartments annually, underscoring the ongoing struggles within the construction industry.

In February 2025, the number of building permits for new apartments fell to 17,900, marking a 2.3% decrease compared to the same month in the previous year.

This decline follows two consecutive months of increases, suggesting a fragile recovery in the construction industry that has faced three years of downturn.

While permits for single-family homes surged by 12.4% in early 2025, permits for two-family homes dropped significantly by 14.5%.

Felix Pakleppa, managing director of the Central Association of the German Construction Industry, stressed the need for simpler and more affordable construction processes to encourage housing development.

Pakleppa proposed targeted measures to boost private investment, including a tax exemption on property transfer taxes to facilitate home ownership for families.

He called for a 'real turnaround' in housing policy, citing high costs, excessive bureaucracy, and lack of planning security as major barriers to construction.

Pakleppa emphasized the need for decisive government action, including tax cuts and reduced bureaucracy, to revitalize the construction sector.

He also highlighted the necessity for reliable financing programs from KfW, which provides funding on behalf of the federal and state governments.

The Central Association of the German Construction Industry attributed the overall drop in housing permits to insufficient political conditions, stating that the sector remains blocked without significant improvements.

Pakleppa reiterated that the housing construction sector will continue to be hindered until there are substantial enhancements in the political framework.

Despite the overall decline, the majority of new permits issued were for multi-family homes, totaling 18,500, although this category also experienced a slight decline of 1.3%.