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Germany: 1.5m housing units to be completed by 2021

21.02.2019 − 

In the current legislative period up to 2021, the German federal government is aiming to complete 1.5m new housing units. Peter Altmaier, federal minister of the economy, announced this intention on 30 January at the presentation of the 2019 annual economic report in Berlin. Including the 284,800 housing units completed in newly constructed as well as existing residential and non-residential buildings in 2017, by 2021 a completion rate of a total 1.530m units ensues according to Euroconstruct forecasts.

In 2018 Euroconstruct expects 300,000 completions. The construction research network forecasts slight increases for 2019 (310,000 units), 2020 (315,000 units) and 2021 (320,000 units). These figures would therefore fall considerably short of the annual completion rate of 350,000 to 400,000 units - the figure which would be required in order to cover the need for housing in metropolitan areas.

From Euroconstruct’s perspective the German housing construction sector up to 2020 will be positively influenced by the development of household incomes, economic outlooks, demographic effects, general financial conditions as well as the state funding for new residential buildings.

The effects of tax incentives for renovation of existing residential buildings as well as the price development for residential property are only minimal, according to Euroconstruct estimates.

A more significant increase in completions of housing units in new residential buildings, however, is hindered by the high utilisation of production capacities in the construction industry as well as, in some cases, delivery problems on the producer side. Currently orders in hand of companies active in housing construction amount to an average of four months.

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