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Germany is facing its most significant downturn in the property sector in decades. The latest data reveals that only 18,200 permits were issued, marking a decrease of 4,100 compared to the previous year, signaling that the slump has persisted for three consecutive years.
In February, building permits for apartments in Germany experienced an 18.3% decline compared to the previous year, according to government data released on Thursday. This downturn underscores a sustained decrease in demand within the construction and real estate sectors.
The property sector in Germany is currently facing one of its most severe slumps in decades. Data reveals that only 18,200 permits were issued, marking a decrease of 4,100 compared to the previous year. This decline signals that the slump has persisted for three consecutive years.
The number of building permits serves as a crucial indicator for future construction activity.
Andreas Mattner, the president of the German Property Federation, has urged the nation's states to reduce property sales tax in order to address the ongoing decline.
Andreas Mattner emphasized the urgency of halting the downward trend in housing construction, stating, "Housing construction is in a downward spiral. It can't go on like this. This downward spiral must be stopped at all costs."
For years, the real estate sector served as a cornerstone of Germany's economy, contributing roughly a fifth of output and supporting one in 10 jobs. Fueled by low interest rates, substantial investments poured into the property market, which was perceived as stable and secure.
However, a significant increase in interest rates has brought an end to this prosperous streak, leading developers into insolvency as transactions stall and property prices decline. Consequently, the number of individuals employed in the construction sector has begun to decline for the first time in a decade.
Despite Germany's ambition to construct 400,000 apartments annually, achieving this target has proven challenging.
Source: ET retail
