Hangin' in there: Mood Improves, But Pressure Remains High in Germany's Residential Construction
Enhanced sentiment in the housing industry - Persisting challenges in the order landscape - Navigating a Challenging Procurement Landscape in Residential Building Projects
Hey there! Let's dive into the latest scoop about the residential construction scene in Germany, focusing on the happening city of Munich. Take a seat, grab a cuppa, and let's mull over the insights from the Ifo Institute for Economic Research and the words of its chief, Klaus Wohlrabe.
The vibes in residential construction are taking a positive turn – although they're still gotta ways to go, says Klaus Wohlrabe, head honcho at Ifo surveys. Companies are more optimistic about the current situation and the upcoming economic picture. But, whether the government's proposed infrastructure package is making a difference? That's still a bit iffy, according to Wohlrabe. They're banking on an all-around industry rebound instead.
Now, the order situation – it's a tricky one. Over half of the builders (51.2 percent) are still grappling with a shortage of orders in late 2025, and that figure even tipped to 53.7 percent in March. At the same time, the number of cancelled orders increased – hit percent overall, which is a jump of percentage points from the previous month.
Things will heat up on Thursday evening when the new Federal Minister of Housing, Verena Hubertz (SPD), lays out her plan of action in the Bundestag. In a recent chat with "Zeit Online," she mentioned government-backed loan guarantees for new apartment construction.
The previous gov claimed they'd build 400,000 new apartments annually. But, guess what? That figure disappears in the coalition agreement between the CDU, CSU, and SPD.
- Order Situation
- Munich
- Germany
- Ifo Institute for Economic Research
- Residential Construction
- Klaus Wohlrabe
Background:
To get the lowdown on the current order situation in residential construction, particularly in Munich, we need to check out the Ifo Institute for Economic Research and Wohlrabe's insights.
Residential Construction in Germany:- Order Shortage: By early 2025, the order shortage in residential construction reached record highs, with 57% of companies reporting a lack of orders in January (up from 53.6% in December 2024)[1]. This paints a tough picture.- Improvement: By May 2025, things eased up somewhat, although specific data on Munich isn't available in the available reports[1][2].- Business Climate: The construction sector's business climate has shown promise with a sentiment improvement among residential construction companies in April 2025[2].
Klaus Wohlrabe's Take:Wohlrabe noted the residential construction crisis remaining the norm, even after ECB's interest rate cuts[1]. This suggests that despite some improvements, the situation is still a challenge.
Munich Facts:The Ifo Institute didn't provide specific data on Munich's residential construction order situation in the search results. However, considering the national trends, the construction industry in major cities like Munich is likely experiencing similar turbulence.
In a nutshell, things are looking somewhat brighter in the residential construction sector on a national scale, but pressure remains high. And Munich? You'll need to keep your eyes peeled for more specific updates. Stay tuned!
- The current order situation in Munich's residential construction sector, as well as across Germany, can be better understood by analyzing data and insights from the Ifo Institute for Economic Research and its head, Klaus Wohlrabe.
- In the order situation, over half of the builders in late 2025 continue to face a shortage of orders, with the number of cancelled orders also on the rise, according to the Ifo Institute data.
