Why can’t Germany build enough homes?

The German government was elected with a plan to build 400,000 new homes a year – but it fell short last year by over 100,000. The country’s house building industry is in crisis, with hundreds of companies going into liquidation this year as order books are emptying and demand for new homes has fallen. So why can’t Germany build enough homes?

A combination of high construction costs caused by inflation since the Covid pandemic, and increases in interest rates in recent years has produced a difficult business environment for a construction sector that is a significant part of the German economy. Along with falling demand, industry experts fear that regulations and bureaucracy are a factor in causing the crisis.

Charmaine Cozier hears from: Dirk Salewski President of the German Housebuilding Federation who attended a recent summit hosted by Chancellor Olaf Scholz when the government announced a 14 point plan to revive housing construction. Alice Pitinni is the research director at Housing Europe, the European Federation of Public Co-operative and Social Housing and says there is a growing affordable housing crisis in Europe. Ireland has endured it's own housing crisis in the past - Michelle Norris, is professor of social policy at University College Dublin, and says Ireland has repeated some of Germany’s mistakes. Jens Boysen-Hogrefe is a senior economist at the Kiel Institute for the World Economy – he says the country faces a tough situation, that worse is yet to come, but it is not a repeat of the post-reunification boom and bust of the 1990s.

CREDITS Presenter - Charmaine Cozier Producer - Phil Reevell. Researcher - Matt Toulson Editor - Tara McDermott

(Photo: A construction worker is seen on the roofing for a new residential building in Dortmund, western Germany, on April 18, 2023) (Photo by INA FASSBENDER/AFP via Getty Images)