Hamburg, May 15 – The mood in the German residential construction sector has significantly worsened in April, according to the business climate index of the Munich-based IFO Institute for Economic Research. However, the situation in Hamburg appears to be somewhat better, with more building permits issued compared to the previous year.
German Housing Sector Faces Steep Decline
The expectations of residential builders have fallen sharply, reaching their lowest point in four years. The sentiment index dropped from minus 19 to minus 28 points. Klaus Wohlrabe, head of IFO surveys, stated, “Geopolitical uncertainty is also weighing on residential construction in Germany.” Additionally, the construction industry is grappling with rising interest rates, inflation since the Iran war, and unstable supply chains.
Material Supply and Order Backlogs Worsen
Concerns about problems in the supply of crucial preliminary products are growing. In April, 9.2 percent of companies reported restrictions in material supply, a significant increase from the one percent reported over several years prior. Furthermore, 44 percent of companies are complaining about a lack of orders.
Hamburg’s Resilience: More Building Permits Issued
The Association of North German Housing Companies in Hamburg confirms the national trend. Director Andreas Breitner noted, “The study aligns with our perceptions. The crisis is becoming the norm. We are counteracting this with the Hamburg Standard, alliances for affordable housing, and the construction turbo.” However, according to information obtained by NDR 90.3 from the City Development Authority, Hamburg is performing better than the national average.
In the first four months of the year, Hamburg issued more building permits than in the same period last year. The district of Eimsbüttel showed particularly strong development, recording 669 building permits in the first quarter alone, which represents two-thirds of its annual target of 1,050 permits.
Housing Association Sees Trough Passed
This year, more new construction projects are expected to be realized than recently, partly due to simplified regulations.
Future Plans and Initiatives in Hamburg
- SAGA Plans Demolition and New Construction in Billstedt: Residents near Merkenstraße subway station currently live in affordable 1950s apartments. SAGA plans to demolish these and replace them with new buildings instead of renovating.
- High Demand for Cooperative Housing: A study reveals an average of 88 applications for each vacant cooperative apartment in Hamburg, with small apartments being particularly popular.
- Empty Offices as Living Space: The Red-Green coalition in Hamburg plans new model projects to convert empty office spaces into residential units. Currently, about six percent of office space in Hamburg is vacant.
These initiatives aim to address the ongoing housing needs in the city and mitigate the broader challenges faced by the German construction sector.
The Hamburg City Development Authority and local housing associations remain committed to ensuring affordable and sufficient housing options for the city’s residents, despite the prevailing economic headwinds.
Source: https://www.ndr.de/nachrichten/hamburg/wohnungsbau-in-hamburg-mehr-baugenehmigungen-trotz-krise,wohnungen-162.html
