Housing construction slowed in Germany after rising interest rates

The German Federal Statistical Office (Destatis) announced data on housing construction permits for August and the January-August period of this year.

Consequently, housing construction permits in Germany decreased by 31.6 percent (8,900) year-on-year in August, to 19,300.

In January-August 2023, compared to the same period last year, licenses decreased by 28 percent (69 thousand 100) to 175 thousand 500.

THE BIGGEST PRICE FALL SINCE 2000

The release states that residential construction permits declined due to rapidly rising construction costs and significantly rising interest rates.

Meanwhile, house prices in Germany fell by 9.9 percent in the second quarter of the year compared to the same period a year earlier, the steepest drop since 2000.

The Association of Real Estate and Housing Companies (BFW) demands that the German federal government take action in the face of the crisis.

On the other hand, the European Central Bank (ECB), fighting against increasing interest rates against high inflation, increased the main interest rates 10 times in a few months. (AA)