BERLIN, Aug. 18 (Xinhua) -- Germany's housing crisis is getting worse as the number of construction permits for apartments in the first half of the year plummeted 27.2 percent year-on-year to only 135,200 units, the Federal Statistical Office (Destatis) said on Friday.
The results painted an "immensely gloomy picture" in residential construction in Germany, said Tim-Oliver Mueller, chief executive of HDB, the German construction industry association.
Permits declined across all types of buildings, according to Destatis. The number of permits for single-family homes fell by 35.4 percent, while for two-family homes the figure dropped by more than half.
"There is no improvement in sight," Mueller said. "Rising interest rates, significantly higher construction costs, further increases in energy requirements, and uncertainty about the future course of political action continue to create an environment in which investors are still putting on the brakes."
"The continuing decline in building permit figures shows that we urgently need additional economic stimulus for residential construction," a spokesperson of the Ministry for Housing, Urban Development and Building told Xinhua on Friday.
"We will, therefore, push ahead with an economic stimulus program for housing construction by the end of September in order to strengthen the construction and housing industry," the spokesperson said.
To curb inflation, the European Central Bank raised key interest rates several times. Since the beginning of August, interest rates on the refinancing operations, marginal lending facilities and deposit facilities will be increased to 4.25 percent, 4.50 percent and 3.75 percent, respectively.
According to official data, prices for building materials rose sharply in 2022, with higher energy prices exacting a toll. Bar steel became around 40 percent more expensive, but other materials with energy-intensive production such as glass also recorded high price surges.
A study commissioned by the German tenants' association DMB warned at the beginning of the year that there was a shortage of more than 700,000 houses in Germany, the largest housing deficit in more than 20 years.
Despite the high demand for housing, the number of building permits in Germany has been falling for months. Minister for Housing, Urban Development and Building Klara Geywitz had admitted that the German government will miss its target of building 400,000 new homes a year.
The Macroeconomic Policy Institute forecast that the number of newly completed housing units would fall from 295,000 homes last year to 223,000 homes in 2023. In 2024, the number could almost return to the historic low of 2009, at 177,000.
It is important "not to lose sight of the massive construction backlog in Germany," the ministry spokesperson noted. Of the more than 800,000 housing units approved, "many of them are now being built or are waiting to be built," the spokesperson added. ■