Forecast: New residential construction in Munich could drop drastically

Forecast: New residential construction in Munich could drop drastically

Munich-The forecast published by experts from the Munich IFO Institute for the coming years in German housing shows an alarming view. The expectations indicate that the number of newly built apartments will drop drastically, which could have significant effects for both tenants and the general living climate.

a decline in building applications

One of the main causes for this dark prediction is the drastic decline in building applications. According to the current figures of the Federal Statistical Office, only 17,800 building applications were approved in May, which corresponds to a decline of almost 44 percent compared to May 2022. This dramatic break -in shows that construction costs and regulations force many housing cooperatives and municipal companies to put new projects on hold. In view of the current construction prices, even smaller cities could be confronted with higher rents that would overwhelm many potential tenants.

causes of the increase in construction costs

The construction prices have achieved an alarming level in Germany. Experts agree that the construction costs that have already been skyrocket will continue to increase. The statistical Federal Statistical Office shows that the material costs do not stabilize as desired, while the labor costs rise rapidly. This situation contributes to uncertainty on the housing market and makes it difficult to build new buildings and expansion projects.

political measures to remedy the housing shortage

In order to counteract this crisis, the traffic light government has started to take political measures. Justice Minister Marco Buschmann (FDP) suggests reducing bureaucratic hurdles to simplify building. Among other things, these measures include the reduction of comfort standards in new buildings, which could result in some savings in the manufacturing costs. Experts estimate that up to 10 percent of the costs could be saved if innovative construction methods are used.

the emptiness in rural areas

Minister Klara Geywitz (SPD) tries to find solutions in rural areas to defuse the housing crisis. She argues that moves from the crowded large cities in smaller cities or the surrounding area are a possible solution. Germany currently has around two million vacancies, but they are not necessarily in the urban centers, where demand is highest. Geywitz emphasizes the importance of actively fighting this vacancy and developing plans for better use of living space, while there are already criticism of such suggestions within the traffic light coalition.

effects on rent development

Although the IFO forecast does not contain any specific figures on the development of rental prices, many indicators indicate that the search for affordable living space for tenants in the big cities will continue to be difficult. While a decline in real estate purchase prices has already been determined in metropolises such as Munich, rents are constantly increasing due to the lack of available apartments. The Economic Research Institute IW Köln even assumes that the annual new construction of apartments should be 372,000 by 2025, but this is far above the current construction decline.

conclusion: the pressure to act is growing

The persistent difficulties in housing are demanding immediate action from the political side. The GDW housing association criticizes the current situation as a "tragedy" and calls for more state investments in the area of new housing in order to cover the urgent need. In view of the upcoming challenges, it becomes clear that housing in Germany plays a crucial role in social and economic stability.

- Nag