The number of new homes built annually in Germany could fall by 35 per cent by 2026 compared to last year, as experts warned of a massive housing shortage in the coming years.

According to a forecast published in Munich on Tuesday by the Euroconstruct research network, Germany is in a poor position compared to other European countries.

According to the forecast, only 175,000 residential units are expected to be completed in Germany in 2026, about 95,000 fewer than in 2023.

Only in Sweden was the number of completed flats in the 19 European countries analysed predicted to fall more sharply than in Germany.

“New housing construction in Germany is often no longer possible, primarily due to the sharp rise in construction and financing costs. Politicians have not yet decisively improved the framework conditions,” said Ludwig Dorffmeister, construction expert at the Munich-based Ifo Institute.

Without tax cuts and targeted subsidies, experts believe there would be a shortage of around 830,000 flats in Germany in 2027.

The German Property Federation (ZIA) warned of this at the presentation of its spring report on Tuesday.

“Building is virtually impossible today. Anyone who builds today will go bankrupt,” said Andreas Mattern, head of ZIA.

He said that new housing developers would only break even with an average rent of 21 euros (22.7 dollars) per square metre.

The property experts urgently called for a reduction in state levies on housing. 

(dpa/NAN)