Why the cranes are standing still

There are few better examples of the gridlock inside the German government than in housing policy.

Photo by Guillaume TECHER on Unsplash

Dear Reader,

There are few better examples of the gridlock inside the German government than in housing policy.

In its coalition pact, the ‘traffic light’ coalition committed itself to building 400,000 new homes every year for the duration of this government. That would have meant an increase of over 100,000 on the average from previous years.

Instead things have gone in the other direction. After the number of completed new homes stagnated last year, the future looks gloomy.

This week the Federal Office for Statistics released figures that showed building applications had plummeted by close to 30 percent in a year - the biggest drop in planning approvals in 15 years. Even the housing ministry struggled to find a silver lining, describing the figure as “pretty awful.”

Meanwhile, the country’s largest real estate company, Vonovia, has frozen all new building projects and is rumoured to be in serious financial difficulty as it struggles to to meet debt o…