Number of new homes in Germany drops by 14% in 2024

The number of new homes built in Germany plummeted by 14.4% last year, due to sharply rising interest rates and construction costs, figures released on Friday from the country's statistical office Destatis showed.

Over the course of last year, 251,900 new homes were completed across Germany - 42,500 fewer than in the previous year, the agency said. "This was the first significant decline after the number of completed homes stood at 294,000 in each of the years 2021 to 2023," the statisticians said.

According to the agency, the rise in interest rates and construction costs caused many developers to abandon their plans, while investors held back.

While the number of new homes built in 2024 is way above the 2009 low of 159,000, it is also a far cry from the record high of 306,400 seen in 2020.

Experts estimate that Germany is short of hundreds of thousands of homes, with rents having risen sharply over the past years.

The previous centre-left coalition government of chancellor Olaf Scholz repeatedly failed to meet its target of 400,000 new homes per year over its three years in office.

As the housing shortage in cities is exacerbated by a slump in construction, many experts expect rents and property prices to continue to rise.

The new conservative-led government, which took office on May 6, has also vowed to build more homes, with Construction Minister Verena Hubertz promising a "housing construction boost."

The minister has said she plans to speed up approval procedures, promote modern construction methods and allow for more land to be allocated for construction.

Peter Hübner, president of the German Construction Industry Association (HDB), who recently said the figures in residential construction were disastrous, noted that new business with residential construction loans increased by almost a quarter in 2024.

"The positive trend continued at the beginning of 2025 and could be a first tentative sign that the bottom is slowly being reached in new residential construction."