Frankfurt am Main: Investment in new housing construction and existing housing in Germany rose by 3.7% last year, and the number of new completed homes was approximately 250,000.
As per forecasts, this record value will be exceeded this year: KfW Research anticipates that around 260,000 new homes will be completed in 2015, as documented in the latest KfW Investment Barometer. Growth in housing construction investment will be curbed slightly though could still increase by 2.5% in 2015.
Dr Jörg Zeuner, Chief Economist at KfW, said, “Housing construction in Germany is once more experiencing an exceptional boom. Alongside higher income and low interest rates for housing loans, the rise in the value of real estate in many regions and, last but not least, high migration are further driving factors behind the growing investment in housing construction.”
An additional 1.7 million people over the last five years have immigrated to than emigrated from Germany. In 2015 a further 500,000 migrants are expected to arrive, of which 300,000 were from EU member states. This increases the demand for rented housing and stimulates investment in residential construction. Besides migration, the increasing income and historically low interest level are providing for investment growth: at the end of 2014, the average effective interest rate for private housing loans with a fixed interest period of over ten years was 2.3%.
