Building permits are rising. So why isn't anyone building?

The German government has rarely looked busier on housing policy. Within the space of a few weeks, the Bundestag has passed a new Procurement Acceleration Act, the Construction Minister has tabled a major amendment to the Building Code, Building Type E is promised for the summer, and the Deutschlandfonds is being redesigned to include a dedicated housing module. The legislative calendar is full. The question the industry is asking — with increasing impatience — is whether any of it will actually work.

The backdrop is a housing construction sector that has endured its worst downturn in a generation and is only now showing tentative signs of life. Building permits are rising, but completions in 2026 are expected to fall further to around 215,000 dwellings, less than half the government's (now-nominal) annual target of 400,000. The gap between approvals and finished homes is not narrowing. It is widening. And rising interest rates and Iran-war-driven construction cost increases are threatening to arrest the recovery before it has properly begun.