Germany's construction industry is in a severe crisis, highlighting the shortcomings of the current government. The market is broken. Although 800,000 homes are needed, as per a Pestel Institute study, the construction sector is witnessing a significant drop in demand for housing projects, with building permits also declining.

Despite promises to build 400,000 new homes annually, only 295,000 were constructed last year. This gap between targets and reality is widening, exacerbating the housing shortage. The industry is warning of an imminent collapse.

Alarming Statistics and Root Causes Recent data from the Federal Statistical Office reveals a dramatic drop in new housing permits—only 17,800 in May, a 24.2% decrease from the previous year, and 43.9% less than in May 2022. Projections suggest fewer than 215,000 housing permits will be granted this year, far below the government's goals.

Inflation and rising interest rates aren't the main culprits. Instead, the lack of building land and constantly changing regulations are stalling progress. The construction sector struggles to retain skilled workers, who are leaving for other industries due to the crisis.

EU Regulations and Future Challenges EU regulations under Ursula von der Leyen's leadership are increasing the costs of construction with stringent environmental standards. These policies, combined with national legislation, are driving construction costs to unsustainable levels.

As Robert Habeck, Germany's Economy Minister, pushes for strict adherence to these regulations, the future of housing construction looks bleak. The AfD's Marc Bernhard warns of an impending "absolute construction crash" due to these policies, predicting a further slowdown in building activities.