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Germany hits 10-year-high in home-building

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Germany hits 10-year-high in home-building
Photo: DPA.
09:39 CEST+02:00
The German housing market is booming, particularly for brand new flats.

High demand and lower mortgage interest rates have been a huge boon to the construction of new housing in Germany since the beginning of the year, the Federal Statistics Office reported on Friday.

In January, the number of housing construction permits granted rose by 34.5 percent, or roughly 6,700 more dwellings, over the same period last year. In total, 26,300 apartments were approved.

Such a high number of permits during the month of January has not been seen for a decade, since January of 2006.

This January, 21,600 new apartments were built, which was 31.3 percent more than last year.

Meanwhile, the number of building renovations made to existing buildings resulted in 4,500 new flats - the highest number in 20 years.

The construction of single family houses also saw a stark increase of 35.3 percent over last year. Multiple-family homes also rose by 28 percent, as well as two-family homes increasing by about 24 percent.

A member of the board at the German Central Bank (Bundesbank) warned though of an overheating of the housing market in big cities.

"We can't yet talk about it being a real estate bubble, however we do see in some German cities that there is definitely price inflation in housing," Andreas Dombret of the Bundesbank told Focus magazine.

"Institutions should be very careful considering the market, and thoroughly weigh their decisions about real estate."

SEE ALSO: German cities struggle with housing shortage

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