Housing construction in Germany: Signs of a turnaround, at least in terms of building permit figures

The housing construction sector appears to be gaining momentum again in the longer term, as indicated by the trend of rising permit figures for residential construction projects. At the same time, however, the mood among market participants involved in housing construction does not yet seem to be keeping pace.

Building permit figures rise for the fifth month in a row

The trend of clearly rising building permit figures is continuing and appears to be stabilising. According to a report by the Federal Statistical Office on 18 December 2025, the number of housing permits has risen once again. In October 2025, the authorities in Germany approved the construction of around 19,900 homes, around 1,300 or 6.8 per cent more than in the same month last year. Approval figures have been rising steadily again since June 2025, after falling until September 2024 and then only slowly beginning to reverse the trend.

In total, the construction of 195,400 apartments was approved in the first ten months of last year, from January to October 2025. That is 11.2 per cent more than in the same period last year. The monthly approval figures are now back at the same level as in 2023.

Number of approved single-family homes rises particularly sharply

The significant increase in building permits can be attributed to two segments. The number of approved single-family homes from January to October 2025 was 37,000. This is an increase of 16.6 per cent or 5,300 homes compared to the same period last year.

The number of approved new apartments in multi-family houses in the same period increased by 13.2 per cent or 12,100 units to a total of 104,100 compared to the same period last year.

In contrast, fewer housing projects were approved in two-family houses. The number fell by 1.1 per cent or 100 flats to 10,600.

The turnaround is particularly clear when compared with the rates of change in building permit figures 12 months ago. These were all significantly negative in October 2024. Overall, 18.0 per cent fewer flats were approved then than in October 2023. Between January and October 2024, 175,800 dwellings were approved. This was 19.5 per cent or 42,600 fewer than in the same period of the previous year. The decline in this period was 23.6 per cent for single-family homes, 13.6 per cent for two-family homes and 22.2 per cent for multi-family homes.

Business climate in residential construction slightly improved – situation remains unstable

According to a press release dated 16 December 2025, the ifo Institute – Leibniz Institute for Economic Research at the University of Munich e.V. also sees a slight improvement in sentiment in residential construction. The ifo business climate index rose from -22.8 to -21.0 points. According to the institute, companies are assessing their situation more positively, but expectations for the coming months remain subdued. ‘Companies in the residential construction sector are currently less pessimistic,’ says Klaus Wohlrabe, head of ifo surveys. ‘However, the outlook for the future remains weak.’

A persistent problem for companies in the residential construction sector is the lack of orders. According to the ifo, the proportion of companies reporting too few orders rose significantly from 44.4 to 47.0 percent.

In addition, there is a growing number of reports of cancellations. In October 2025, the proportion of companies with cancellations was 11 percent, compared to 8 percent in the previous month. This is the highest figure since October 2024, according to the ifo Institute.

‘Many construction projects are being postponed or cancelled altogether,’ said Wohlrabe. ‘This shows how unstable the situation in residential construction continues to be – a real recovery is still not in sight.’