The German housing market is showing signs of recovery, as the latest figures from the Federal Statistical Office show. In January, building permits rose significantly for the second time in a row, by 6.9% or 1,200 to a total of 18,000 apartments. This marks the largest increase since the beginning of 2022 and indicates a possible trend reversal.

Particularly noteworthy is the increase in single-family homes, where approvals rose by 21.7 percent to 3,400. In contrast, two-family houses recorded a decline of 10.1 percent to 1000 permits. Multi-family houses, the largest category by number of apartments, recorded an increase of 5.8 percent to 9800 apartments.

These developments indicate that the housing crisis may have bottomed out and give hope that the market will recover in the coming months.

The statisticians explained that the number of building permits issued had fallen continuously since April 2022 compared to the same month in the previous year. In 2024, the authorities issued permits for 215,900 homes, which is the lowest figure since 2010. Rising interest rates and the high cost of building materials have deterred many potential builders in recent years and significantly slowed down residential construction.

However, in their recently published spring report, the so-called real estate experts do not expect a turnaround. According to their forecasts, the number of building permits is expected to be around 210,000, which would mean a 45% decline compared to 2023. Current building permits are seen as an early indicator for new builds in the coming years. For 2025, real estate experts assume that only around 230,000 new residential units will be built – far less than the original target of 400,000 set by the outgoing German government.