Germany will abandon strict building regulations

According to the data, the German government has agreed on a package of measures to support the struggling construction and housing sector.

The German government on Monday approved a 14-point plan to tackle the country's housing crisis.

The agreement came on the day of a crucial meeting between the construction industry and government leaders and Chancellor Olaf Scholz, as the construction and housing industry is in crisis.

What is the government planning to combat the housing crisis?

Berlin will indefinitely suspend plans to introduce stricter standards for building insulation. This would mean a departure from the EH40 energy saving standard, according to the document seen by several news agencies.

The government coalition of the centre-left Social Democrats (SPD), the environmentalist Greens and the neoliberal Free Democrats (FDP) had agreed to make EH40 the norm by 2025. EH40 means a 40% energy requirement of a building comparable. The current standard is EH55.

"Given the difficult conditions currently prevailing in the construction and housing sector due to high interest rates and construction costs, the introduction of EH40 as a mandatory legal standard for new buildings "is no longer necessary during this legislature and will be suspended", it is stated in various information.

"High interest rates and inflation are a heavy burden for the construction industry," German Economy Minister Robert Habeck said on Monday, quoted by the Reuters news agency. The minister noted that the lockdown measures, which the construction industry said would dampen an already depressed market, "can wait". "I don't see how this new standard can be introduced during this legislature," Habeck said.

Other measures include expanding access to affordable credit and "climate subsidies" aimed at replacing heating systems that use fossil fuels with environmentally friendly systems.

Sector in difficulty

For months, the plan has drawn strong criticism from the construction industry due to the significant increase in construction costs.

During the period when interest rates were low, increasingly strict housing standards were developed at federal, state and local level, said Klara Geywitz (SPD), Minister of Justice and Construction, on public television channel ARD. "Today, all three levels of government must understand: we must lower standards and lower costs."

German residential property prices are facing a serious slump, with the biggest price drop recorded this year since records began in 2000, according to data from the Federal Statistics Office.

The data also show that building permits for apartments in Europe's largest economy fell 31.5% in July compared to the same month a year earlier, while construction prices rose by nearly 9% over the year. In its coalition agreement, the government set a target of 400,000 new buildings each year./ DW