Building permits skyrocket in September?2025 | 11/2025

by Martin Langen

by Martin Langen | B+L

Recent Statistics Paint a Clear Picture
The latest figures from the Federal Statistical Office (destatis) released in September show a striking development: for pure new-construction permits (excluding measures on existing buildings), the increase amounts to an impressive +80,1% compared with the previous year. The often-cited figure of +59,8% refers instead to the total volume, which also includes permits for existing stock (e.g., extensions, roof dormers). Those “stock” permits have, however, declined sharply and therefore distort the picture of genuine new construction. For the building-materials and supplier industry, only the pure new-construction numbers matter – and they signal a massive turning point.  

Interest Rates Stable, Purchase Prices Back in the Green – The Transaction Market Is Booming
Since the fourth quarter of 2024, real-estate prices have been rising again. Single-family houses are up +4,8% (annualised), and owner-occupied apartments are also showing noticeable gains. This price rise is one of the strongest drivers of the current market dynamics: buyers who waited during the price-decline phase (“it will get cheaper”) are now rushing in for fear of missing the bottom. As a result, the disbursement of residential construction loans in 2024 has returned to the 2021 level and, in some months, even exceeded it – reaching up to €22 billion per month. Most transactions involve existing properties; the purchase market is running at full speed. Banks are financing more generously again because higher prices automatically improve loan-to-value ratios.  

Funding Is Back – and This Time the Pots Are Truly Filled
Home-ownership subsidies through the KfW (e.g., up to €200.000 low-interest loans for families with several children) are back – essentially at the level that existed before the abrupt funding stop under Minister Habeck. For 2026, €6,7 billion is earmarked for new construction and €12,1 billion for modernization. From 2027 onward these amounts will be pooled into just two large funds, which will simplify the application process considerably. Importantly, the money is actually available this time – unlike in some previous years when approvals were issued but no funds were disbursed.  Call to manufacturers and retailers: Actively inform your customers! Many still do not know that substantial grants and low-interest loans are once again on the table.  

Private Residential Construction Takes Off – Renovation Remains (For Now) Weak
Construction of single-family houses is expected to rise by almost +8% in 2025, and multi-family housing by +4,5%. A striking trend: the majority of newly approved apartments in multi-family buildings are now rental units, not owner-occupied flats – a fundamental structural shift. Private renovation, on the other hand, stays far below expectations in 2025 with only +1,5% growth. Surprisingly, even after purchasing a home, many owners do not renovate – neither bathrooms nor floors. Some buyers move in without even changing the curtains. Reasons include: a sustainability mindset (“second-life” trend), a nostalgic 80s/90s vintage aesthetic, and simply a lack of cash despite the higher number of transactions. The renovation backlog is building up – eventually it will have to be caught up.  

Non-Residential Construction: Pipeline Still Full form 2022/2023, Then a Collapse 
Despite dramatic drops in permits (office construction – 20%; industrial construction – 13,6%), order intake in non-residential construction still rises by +8% in 2024. Explanation: many large projects launched during the high-interest period of 2022/2023, with long planning horizons, are now only entering the execution phase. Consequently, non-residential new construction is likely to end 2026 still in positive territory – after which the pipeline will run dry. A bright spot remains public and municipal construction (schools, kindergartens, hospitals, sports halls), which, despite all austerity rhetoric, continues to grow, +10% in 2024, with approved square metres in “other buildings” up +43%.  

Conclusion and Outlook for 2026
Four out of five construction segments will be in the black in 2026: single-family house construction, multi-family house construction, residential-building renovation, and non-residential building renovation. Residential construction will regain its position as the strongest market segment – good news for the entire supply industry, which primarily produces small-scale, housing-related products. The macro-conditions (prices, interest rates, subsidies) are back in alignment.  The biggest uncertainty remains the consumption and sentiment climate of private households. Yet even here a pattern emerges: the more new builds and relocations occur, the stronger the medium-term renovation impulse will become.  

The market is turning – from non-residential to residential construction – but the renovation wave has not yet fully arrived.