BERLIN, May 24 (Xinhua) -- The number of newly-constructed homes in Germany rose to levels last seen in 2002, figures by the Federal Statistical Office showed on Thursday.
According to the figures, housing construction grew by 2.6 percent to a total of 284,800 units in 2017, marking the sixth consecutive annual increase since 2011.
Nevertheless, the federal government in Berlin, construction companies and tenant associations warned the number of newly-built homes in Germany is still too low to meet demand in fast-growing cities.
The Christian Democratic Union (CDU), Christian Social Union (CSU) and German Social Democrats (SPD) have agreed in their coalition agreement to 1.5 million apartments, or 375,000 per year, throughout the current legislative period.
The Federation of the German Construction Industry (HDB) expects the sector to fall slightly short of the government's official target in 2018, completing between 330,000 and 340,000 apartments.
Although the number of newly-issued building permits fell dramatically by nearly seven percent in 2017, the number of approved apartments still surpassed the number of completed units by 347,900. The state-owned KfW banking group highlighted a resulting overhang of 653,300 building permits in Germany which have yet to result in any actual housing construction.
The KfW group pointed to a lack of capacity in the construction sector as one explanation for the phenomenon, but also warned that many investors in large cities were increasingly hoarding building permits to "speculate on rising rental costs and real estate prices."
Similarly, the HDB president Peter Huebner argued many owners were simply waiting to see the value of their property increase. The overhang of approved but unbuilt homes in Germany is currently at the highest level measured since 1999.
The German construction sector has been booming for several years and was a rare bright spot in the Federal Statistical Office's disappointing report on economic growth in the first quarter (Q1) of 2018 on Thursday.
Amongst others, experts have attributed the trend to the lasting low-interest rate environment which drives investors towards real estate in search of higher yields.
