Real estate: Why there is hardly any construction despite 60 billion euros in funding

Munich. Around 60 billion euros. According to Federal Construction Minister Verena Hubertz (SPD), this sum is available from the federal, state and local authorities for new, primarily socially subsidized housing. From the minister's point of view, this money now urgently needs to be invested.

But investments are only made where construction is taking place. The exchange with industry representatives at Expo Real, Europe's largest real estate trade fair, shows that it is not just faster approval procedures that are necessary.

According to the Federal Construction Minister, around 148,000 new apartments will have been approved nationwide from January to July 2026, more than in ten years. For Hubertz, this is a clear sign that the construction turbo she initiated has ignited. With the rules that the SPD politician presented in 2025, buildings should be approved more quickly.

According to André Berghegger from the German Association of Cities and Municipalities, this is only a first step. He calls for faster processes in the planning and implementation of construction projects. Progress on larger projects is still far too slow.

The minister knows this wish. She wants to respond with a new, second construction turbo that is intended to streamline the building code. “We have to digitize hard,” said Hubertz at the trade fair.

This is met with goodwill in the industry. “But there is a lack of faith,” as Jochen Völckers from the real estate consultancy Avison Young explains. Völckers sees the problem locally and there is still so much pressure that can be applied in Berlin. There is a lack of staff in the responsible authorities.

In his experience, builders and property owners repeatedly report additional hurdles that drag out projects. “It is not uncommon for the costs to be higher than the estimated profit,” he says. Many builders and ultimately buyers also shied away. Attempts are often made to reduce the price to the seller of the property.

There is consensus in the industry: the real estate market has been in crisis since 2022, when the low interest rate phase ended abruptly. Since then, building sellers have had a hard time getting the prices they need to avoid making a loss.

But the housing industry is also dealing with another issue. Vonovia boss Luca Mucic is more concerned about legal security in Germany. “When I talk to investors and large shareholders, the first thing that comes up is the question of socialization,” says the CEO of the country’s largest private landlord.

Since the Berlin election, which the Left won with its demand to expropriate private housing companies, investors from home and abroad have been worried. Construction Minister Hubertz wants to dispel these concerns.

The “Invest in Germany Summit” will take place in Berlin on October 19th and 20th. Federal Chancellor Friedrich Merz opens the conference. Domestic and foreign investors are invited – including from the real estate industry.