German building permits rise 6.8 percent in August – industry remains cautious
Germany approved 20,600 dwellings in August, 6.8 percent more than a year earlier. Industry associations speak of a recovery from the low point but warn of higher interest rates and costs.
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Germany approved the construction of 20,600 dwellings in August, 6.8 percent or 1,300 more than a year earlier, the Federal Statistical Office said on Friday. From January to August, the number of permits rose by 12.1 percent to 169,400 dwellings. Two-family houses saw the strongest growth (up 21.7 percent to 10,000 dwellings), apartment buildings rose 14.5 percent to 90,600 and single-family houses 7.8 percent to 31,500. Only dormitories declined, by 2.0 percent.
"We are recovering from a historic low; we are still far from a normal level," said Felix Pakleppa, chief executive of the Central Association of the German Construction Industry (ZDB). Tim-Oliver Müller of the Main Association of the German Construction Industry noted that a dwelling approved today would be completed "at the end of 2028 at the earliest" and pointed to a backlog of 760,700 approved but unbuilt dwellings. The ECB has raised its key rate twice this year, and mortgage rates have also risen. Steffen Zetzmann of the Kiel Institute for the World Economy told Reuters that projects only pay off if rents cover the higher financing and construction costs: "If that fails, new construction is likely to decline."