Germany sees sharp drop in new homes as it launches major conversion programme

In 2025 the German state of North Rhine‑Westphalia (NRW) reported 37,185 completed apartments, a 9.4% decline from 2024 and the lowest annual total since 2011. The fall was driven by a 13.9% drop in new single‑family houses, a 19.7% reduction in two‑unit buildings and a 4% dip in larger multi‑family projects. The overall housing‑construction quota fell to 19.8 units per 10,000 residents, down from 26.9 in 2020, with Cologne achieving the highest regional rate and Krefeld the lowest.

At the federal level the KfW development bank introduced the “Gewerbe zu Wohnen” programme, effective July 2026, to subsidise the conversion of vacant office, commercial and industrial buildings into residential units. The scheme will cover up to 30 % of eligible costs, capped at €30,000 per new dwelling, with several hundred million euros earmarked. Christian Baierl, CEO of renaissance Immobilien, said Germany’s housing reserve already exists in unused building stock and that the programme “shifts the focus from green‑field construction to re‑thinking existing assets.” The initiative aims to create thousands of homes while reducing the carbon footprint associated with demolition and new builds.