Building Permits at Record Low: Housing Construction Plummets in 2024

As reported by the Federal Statistical Office in its press release on February 18, 2025, only 215,900 apartments were approved for construction in Germany in 2024. This represents a decline of 16.8% or 43,700 apartments compared to the previous year. The number of building permits has thus dropped to its lowest level since 2010 (187,600 apartments). With 172,100 approved new apartments, the number decreased by 19.4% or 41,500 units compared to 2023. Companies and private individuals, who account for around 93% of new building permits, are largely responsible for this decline. Companies received 92,300 building permits in 2024, a decrease of 21.6% from the previous year. Private individuals registered 68,400 permits, a drop of 15.6%. The public sector also approved 8,800 permits, marking a 19.8% decline. The number of permits for single-family homes fell by 20.3% to 37,900 units, while two-family homes saw an 11.3% decrease, with only 12,700 apartments approved. The majority of new construction permits were for multi-family houses, accounting for 66.4% of all approved apartments. However, even this segment recorded a decline of 19.7% compared to 2023.

Source: https://www.destatis.de/DE/Presse/Pressemitteilungen/2025/02/PD25_061_3111.html

Housing Protection Remains: Berlin Extends Conversion Regulation Until 2030

The Berlin Senate has decided to extend the conversion regulation for another five years until March 12, 2030. This regulation, which was first introduced in 2015, stipulates that in so-called milieu protection areas, the conversion of rental apartments into condominiums requires official approval. The aim is to protect the composition of the residential population and prevent displacement effects. Currently, there are 81 such social conservation areas in Berlin, home to approximately 1.2 million people. Without the extension of this regulation, a significant increase in conversions would have been expected, further intensifying the pressure on the housing market.

Source: https://www.rbb24.de/politik/beitrag/2025/02/berlin-milieuschutzgebiete-umwandlungsverordnung-verlaengerung.html

Finance Ministry Bans Cash Payments for Real Estate Purchases

The Federal Ministry of Finance, in agreement with the Federal Ministry of Justice, has amended the Money Laundering Reporting Ordinance for Real Estate (GwGMeldV-Immobilien) to strengthen the fight against money laundering in the real estate sector. The amendment was published in the Federal Law Gazette on January 20, 2025, and came into effect on February 17, 2025. The core point of the new regulation is the enforcement of the ban on cash payments for real estate purchases, which has been in place since April 1, 2023, according to Section 16a of the Money Laundering Act (GwG). Moving forward, two new reporting obligations will apply: first, a report must be submitted to the Financial Intelligence Unit (FIU) if the cash payment ban is violated; second, in cases where proof of non-cash payment is either bypassed or not provided. These measures are intended to ensure greater transparency in real estate transactions and to curb illegal financial flows more effectively.

Source: https://www.bundesfinanzministerium.de/Content/DE/Gesetzestexte/Gesetze_Gesetzesvorhaben/Abteilungen/Abteilung_VII/20_Legislaturperiode/2025-01-20-GwGMeldV-Immobilien/0-Verordnung.html