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Business

German home construction boom accelerates

Steeply rising rents and cheap funding for housing construction have been fuelling an unprecedented building boom in Germany. In the first half of this year, the sector saw double-digit growth, with no end in sight.

Spezialfirmen setzen direkt anschließend an die Giebelseiten alter Gründerzeithäuser neue Wände, um die noch vorhandenen Baulücken in der Magdeburger City, wie hier in der Hegelstraße, zu schließen. Bis zur 1200-Jahr-Feier im Jahre 2005 wird die Stadt Magdeburg, wo gegenwärtig rund 280.000 Menschen leben, die größte bauliche Umgestaltung der Nachkriegsgeschichte erleben. Foto: Jan Bauer +++(c) dpa - Report+++

Magdeburg Bau Gründerzeithäuser Archiv 2005

German building authorities granted 124,900 building permits during the first half of this year, which is 10,900, or about 10 percent, more than in the same period a year ago, according to the latest statistical figures released Friday.

Statisticians at the German Federal Statistics Office, Destatis, said the figures clearly point to a continuation of positive developments in the German home construction market.

The German building boom has been unfolding in the wake of steeply falling interest rates as a result of the eurozone debt crisis that forced the European Central Bank (ECB) to cut rates to historic lows.

In addition, rents in Germany have soared in recent months, with the markets reflecting years of low building activity.

In the first half of 2013, the homebuilding boom was driven primarily by public investments in new apartment buildings. Municipality-owned housing construction surged 30 percent from a year ago, Destatis data showed.

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As a result, construction of apartment buildings led the boom with growth of 21 percent, followed by semi-detached houses, up 13 percent. Construction of detached single-family housing posted only a small gain of 1.5 percent.

Industrial construction, however, slumped in the first six months of the year on low capital investments by businesses as a result of sluggish economic growth.

uhe/dr (dpa, AFP)

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