Following the announcement of new cuts to the federal budget, the Housing Construction Association Alliance sent an open letter to Chancellor Friedrich Merz and other members of the federal government. The letter, which was reported by the “Redaktionsnetzwerk Deutschland,” urges the government not to cut funding for housing construction, so that the sector can at least continue operating at its current low level.
The letter, signed by organizations such as IG BAU, the Federal Association of German Building Material Retailers (BDB), and the Federal Association of German Residential and Real Estate Companies (GdW), warns that the current situation is heading beyond mere stagnation. The signatories fear that the already deep crisis in the sector could rapidly escalate into a massive collapse of housing construction. They primarily attribute this concern to drastic budgetary cuts. They contend that in 2027, the budget available for new construction alone will be less than what is available this year-a reduction of nearly 1.4 billion euros. This, they claim, will severely impact the already struggling new construction sector and serve as a huge brake on its progress.
According to the experts, the construction industry is behaving differently from other sectors. “Targeting the housing industry with austerity now will slow down investments-leading to significant short-term and long-term consequences for construction, renovation, and housing in Germany,” the experts cautioned. They also warned of a permanent exodus of skilled workers.
Furthermore, the experts believe that the government’s climate goals are also under pressure. If the planned cuts are actually implemented, they estimate that the housing construction industry’s ability to reach climate objectives could become impossible. The savings are reportedly targeting “precisely the climate-effective and socially sensible renovation projects in multi-family homes,” thereby preventing the practical implementation of necessary strategies.
The open letter was reportedly delivered to Federal Chancellor Friedrich Merz and Economic Minister Katherina Reiche (both CDU), as well as Building Minister Verena Hubertz and Finance Minister Lars Klingbeil (both SPD). Members of the coalition parties, as well as members of the Green and Left parties in the Bundestag, were also made aware of the situation.
