Housing construction in Germany: Ifo expects new low

Ifo forecast

Germany is building even fewer apartments

There is a shortage of housing in many cities, but the number of new buildings continues to decline. The Ifo Institute only expects 185,000 completions in 2026.

Despite a lack of living space in many metropolitan areas, fewer apartments are expected to be built in Germany this year than last year, according to the Ifo Institute. The Munich research institute announced on Thursday that 185,000 housing completions are expected, based on a forecast by the European research group Euroconstruct. According to the Federal Statistical Office, almost 207,000 apartments were completed last year – fewer than at any time since 2012.

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However, politicians’ scope for action is limited: Whether construction takes place also depends on external factors such as global crises, which in turn have an impact on interest rates and construction costs. Ifo industry expert Ludwig Dorffmeister explains: “The prospects for housing construction in Germany had brightened somewhat by February Iran war and increasing construction inflation are likely to make life more difficult for project developers and house builders.”

An increase to 195,000 completions is expected for 2027. In 2028, the number of 210,000 units is likely to “slightly exceed the 2025 value again for the first time,” explained the Ifo Institute. Nevertheless, the level remains around 17 percent below the level in 2024. “The reasons for the very slow recovery also include the long period of time between approval and completion, which has increased by around half a year to 27 months since the beginning of this decade,” explained Dorffmeister.

For European housing construction, the expert group expects a “moderate expansion” of construction activities in the coming years. According to the forecast, a total of 1.57 million units will be completed in 2028. “In countries like Spain, France and Great Britain Significantly more apartments are likely to be completed in the coming years, while for Germany and… Italy At most, it will go up slightly,” explained Dorffmeister. Overall, according to the Euroconstruct forecast, the European construction industry will expand by two percent per year from 2026 to 2028.