German Construction and Real Estate Enjoying Double-digit Growth

Investments posted impressive growth in 2018 in both the building industry and the property market in Germany

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Dec 18, 2019, 10:40 ET

BERLIN, Dec. 18, 2019 /PRNewswire/ -- The currently unsettled international economic climate seems to be having little to no effect on Germans constructing new buildings and buying and selling existing ones.

New figures from the Germany's Federal Office of Statistics show that German construction companies invested 4.7 billion euros in tangible fixed assets in 2018 – a remarkable increase of 17.4 % over the previous year. That volume of investment was the highest in 24 years. In 1995, in the wake of German political reunification, German construction companies also invested the equivalent of 4.7 billion euros.

Driving the investment is the continuing boom on the German property market. A new report based on data from all of Germany's 16 federal states shows that real-estate investments in 2018 reached a record level of 269 billion euros from 990,000 transactions. That represents a plus of around 13%.

The lion's share of the growth came in the purchase of residential buildings, in which 180.5 billion euros were invested. Prices for apartments in major German cities like Berlin, Munich and Hamburg have roughly doubled in the past decade.

And robust growth looks set to continue if perhaps at a somewhat more modest level.

"We anticipate further high demand for residential property," says Anne Bräutigam, senior manager in energy, construction and environmental technology at Germany Trade and Invest (GTAI). "German business institutes reckon with up to 3.3% year-on-year growth in investments in the construction sector in 2020. And the sector will be getting some new impulses. The German government is supporting the development of new technologies, especially in the areas of sustainable construction, digitalization and building waste recycling."

Germany Trade & Invest (GTAI) is the economic development agency of the Federal Republic of Germany. GTAI supports German companies setting up in foreign markets, promotes Germany as a business location and assists foreign companies setting up in Germany.

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SOURCE Germany Trade & Invest