German minister hails 'turnaround' as approvals of new flats rise 10%

German authorities approved the construction of more new flats in 2025 after three years of decline, the Federal Statistical Office said on Wednesday.

Some 238,500 units were approved, an increase of 10.8% on the previous year, which had seen the lowest level since 2010.

The number of permits for new flats and conversions of buildings into residences rose for the first time since 2021.

Constrution Minister Verena Hubertz hailed the results as proof that a "turnaround in housing construction has begun."

Approvals were up 17.8% over the second half of the year, showing that "much is moving in the right direction in residential construction," the minister explained.

"The mood in the industry has improved and investments are also rising," Hubertz said, praising "clear political decisions."

For years, affordable housing has been in short supply in German cities such as Munich, Frankfurt and Berlin, with high housing costs becoming a considerable burden for many people.

The previous German government under ex-chancellor Olaf Scholz had promised to build 400,000 new flats every year, but only 251,900 were completed in 2024, the lowest since 2015.

Chancellor Friedrich Merz's administration has promised to launch a "construction turbo" to speed up approvals.

Hubertz expressed confidence that this and other measures taken by the government will ensure "that the positive trend continues in 2026."

However, most building construction companies do not expect the "construction turbo" to have a noticeable effect until 2027 and 2028.

In addition, industry figures warned on Wednesday that approved construction projects are not always implemented.

"The slight upward trend in approved building applications should not obscure the fact that a significant proportion of projects are delayed or not carried out at all," said Dirk Wohltorf, the president of the German Real Estate Association.

"The political success of the federal government must be measured by the number of construction completions," said Tim-Oliver Müller, chief executive of the German Construction Industry Association.

"Only then will the positive reports translate into orders for housing construction companies and affordable housing."

According to estimates by the real estate industry, 215,000 apartments will be completed in the current year, around 20,000 fewer than in 2025 and significantly less than needed.

"We are facing a huge deficit, which is putting enormous pressure on the housing market in cities," said Felix Pakleppa, chief executive of the Central Association of the German Construction Industry. "And 2026 will be no better: completion figures will continue to fall because an approved flat takes two to three years to complete."