Decrease in newly constructed residential units in North Rhine-Westphalia - Construction of new residential properties in NRW experiences a significant increase
Decrease in New Apartment Construction in North Rhine-Westphalia
North Rhine-Westphalia (NRW), Germany's most populous state, has witnessed a substantial drop in the construction of new apartments. According to the Statistical Office of North Rhine-Westphalia (IT.NRW), only 41,025 apartments were completed in 2022, a decrease of 7,123, or 14.8 percent, compared to the previous year.
The decrease was most pronounced in single and two-family houses. The number of new single-family houses fell by nearly a quarter to about 7,370. For new buildings with two apartments, the number decreased by 720 to approximately 2,580. In the case of multi-family houses with three or more apartments, the decline was 18.9 percent, with around 22,470 apartments completed, which is 5,238 fewer than in 2022. The only category that saw an increase was renovations or extensions, with 950 more apartments completed compared to the previous year.
IT.NRW attributes the decline in new apartment construction to a decrease in building permits issued. Over the past five years, these have decreased by 34.4 percent. While 40,554 apartments were approved last year, there were 61,849 in 2021. Building permits are considered a key indicator of future construction activity, as they represent planned building projects.
Nationwide, the number of new apartments also decreased by approximately 14 percent. According to the Federal Statistical Office, 251,900 apartments were completed in Germany in 2022, a decrease of 42,500 compared to the previous year, which is the lowest level since 2015.
The persistent slowdown in construction is largely due to significantly increased interest rates and construction costs. Many homeowners have shelved their plans, and investors have held back as building is no longer profitable for them. Experts estimate that Germany is short of hundreds of thousands of apartments. The Federal Chancellor, Friedrich Merz (CDU), recently put the figure at "500,000 and more."
The new Federal Minister of Housing, Verena Hubertz (SPD), has announced plans for a "housing construction turbo" in her first 100 days in office. She criticized the complicated and lengthy approval procedures, high construction costs, and opaque funding conditions. "The excavators must start rolling again, and we must build, build, build," Hubertz said. "And that at affordable prices."
- NRW
- Housing Crisis
- Construction costs
- Düsseldorf
- Germany
- In an effort to address the ongoing housing crisis, especially in North Rhine-Westphalia (NRW), the new Federal Minister of Housing, Verena Hubertz (SPD), proposed a "housing construction turbo" to combat the persistent slowdown in construction caused by increased interest rates and construction costs.
- Recognizing the importance of employment in the housing market and real-estate investments, policy makers may need to consider implementing community and employment policies that encourage development and reduce costs to stimulate growth in apartment construction, such as in North Rhine-Westphalia.
