Study: House-building crisis has shaved 0.6 points off German GDP

A collapse in residential housing construction between 2023 and 2025 has weighed on Germany's overall economy, with around 84,600 fewer homes built in 2025 than two years earlier, according to a study released on Wednesday.

The Construction Monitor 2026 found that the shortfall represented a net revenue loss for the construction sector of around €26.9 billion ($31.4 billion) over two years. GDP came in 0.6 percentage points lower as a result, while tax revenues were around €7 billion less, the study found.

The Pestel Institute, which produced the Construction Monitor on behalf of the Federal Association of German Building Materials Retailers, uses "stable construction activity" as its benchmark. That means it calculates what would have happened if around 300,000 homes had also been built in 2025, as in previous years. According to the Federal Statistical Office, 206,600 homes were completed last year.

1.35 million homes missing

"Economic growth only works with more housing construction," said Matthias Günther, head of the Pestel Institute. 

According to the Construction Monitor, there is currently a shortfall of 1.35 million homes across Germany, a figure the institute had already calculated at the start of the year on behalf of the Social Living Alliance. The researchers said the shortage was also becoming a brake on employment.

Where affordable housing was lacking, vacancies were difficult to fill, particularly in economically strong regions, the study said.