Germany’s largest real estate group, Vonovia, has reported multibillion-dollar losses and asset write-downs. Job growth for construction workers has also stalled.
New construction in the country fell sharply in the first half of the year, down 47% compared to the average for the past two years. Additionally, the number of building permits fell 27% in the first five months.
House prices also fell by 6.8% year-on-year in the first quarter, the largest decline since Germany began keeping statistics.
“The current crisis will certainly continue for a while yet,” said Sven Carstensen, chief executive of Bulwiengesa, a property consultant and analysis firm.
Germany, whose population has recently been boosted by millions of migrants and refugees from Ukraine, aims to build 400,000 apartments a year but is struggling to meet this targets.
Politicians, ministries and representatives of the real estate industry will meet with Chancellor Olaf Scholz on September 25 to try to find solutions.