According to the construction industry, the federal government is failing with its promise of 400,000 new apartments a year.

"There is a risk of a crash with the announcement that the government will miss its housing goal with a bang," said the President of the Association of the German Housing Industry, Axel Gedaschko, of the "Bild". Builders would therefore have to charge up to 60 percent more rent than two years ago.

Specifically, Gedaschko expects around 250,000 new apartments to be built this year. For 2023 he predicts 200,000 and for "2024 even less". He cited increased material costs, higher interest rates and falling state subsidies as reasons.

"Investors are in a double bind"

The President of the Main Association of the German Construction Industry, Peter Hübner, also pointed out the cost increases and the increased interest on loans. "Investors are in a double bind. In the future, this will ensure that housing construction will decline and that the federal government's goals will never be achieved," he told the broadcasters RTL and ntv. Many clients are withdrawing their orders, or construction is no longer being carried out to the extent "as we imagined," said Hübner. At the same time, the demand is "infinite".

Gedaschko called on the federal government to cap the interest on building loans via the state bank KfW. Mathias Schäfer, President of the Federal Association of German Prefabricated Construction, said: "In the case of a new building, clarity about the funding options must now quickly be found. Without reliable framework conditions, more will be lost here."

Regardless of inflation, the government wants to achieve the target of 400,000 new homes per year, including 100,000 social housing units. Chancellor Olaf Scholz and Minister of Construction Klara Geywitz had confirmed the goal after a meeting with the construction industry in October in the Chancellery. This should succeed with around 190 different measures.