Decline in Newly Constructed Apartments in North Rhine-Westphalia - Building of new residences in NRW experiences a significant increase
Decline in Housing Construction in North Rhine-Westphalia
The number of newly built apartments in North Rhine-Westphalia (NRW) has seen a sharp decrease last year, with 41,025 apartments completed, including renovations – a drop of 7,123 apartments or 14.8 percent compared to 2023, according to the Statistical Office of North Rhine-Westphalia (IT.NRW).
The decline was particularly pronounced in single and two-family houses, with the number of new single-family homes decreasing by almost a quarter to around 7,370. For new buildings with two apartments, the number of units dropped by 720 to approximately 2,580. Multi-family homes with three or more apartments also saw a decline of 18.9 percent, with around 22,470 apartments completed, which was 5,238 fewer than in 2023. The only category that saw an increase was renovations or extensions of existing buildings, with 950 more units completed, totaling 5,990.
IT.NRW attributes the decrease in new apartment construction to the decline in building permits issued. Over the past five years, these have dropped by 34.4 percent. While 40,554 apartments were approved last year, there were 61,849 in 2021. Building permits are considered an essential leading indicator for future construction activity, as they represent planned construction projects.
At the national level, the number of new apartments also decreased by around 14 percent last year. According to the Federal Statistical Office, 251,900 apartments were completed in Germany, 42,500 fewer than the previous year, marking a low point since 2015.
The persistent slump in construction is attributed to significantly increased interest rates and construction costs. Many homeowners have shelved their plans, while investors have hesitated due to the unprofitability of construction. Experts estimate that Germany has a housing shortage of hundreds of thousands of apartments, with Federal Chancellor Friedrich Merz (CDU) recently putting the shortage at "500,000 and more."
Addressing the Housing Construction Crisis
To combat the housing construction crisis, several factors are being considered or addressed:
- Streamlining Regulations: In an effort to make construction more manageable and affordable, some states, such as Baden-Württemberg, are simplifying building regulations to shorten construction timelines and reduce unnecessary standards.
- Promoting Modular and Prefabricated Construction: The focus has shifted towards modular and prefabricated construction, which can help reduce costs and time by utilizing prefabricated components. New guidelines, such as DIN 1052-11:2025, support this approach by providing a framework for modular timber panel systems.
- Investment in Innovation: Companies are turning their attention to technological advancements, like developing prototypes for prefabricated homes and modern heating infrastructures, to lower costs and improve efficiency.
- Strategic Planning and Funding: There is a call for more strategic planning and funding to support the construction sector, including type approvals and standardized building methods, to make way for serial replication and eliminate bureaucratic hurdles.
- The decline in housing construction in North Rhine-Westphalia, as well as nationwide, could potentially be mitigated by streamlining community regulations to make construction more affordable and manageable, much like the efforts undertaken in Baden-Württemberg.
- To improve the affordability and efficiency of housing construction, there is a growing emphasis on investing in the finance, real-estate, and business industries, particularly in promoting modular and prefabricated construction through innovative guidelines like DIN 1052-11:2025.
- As the housing crisis persists, the government is advised to invest in innovation and technology, such as the development of prefabricated homes and modern heating infrastructures, to make construction more profitable and efficient, appealing to both homeowners and investors.
