Housing industry: rising costs, less output

The Saxon housing industry continues to complain about rising costs. "Despite increased investment, we were able to achieve less construction output in real terms," said Mirjam Philipp, CEO of the Association of Saxon Housing Cooperatives (VSWG), at the 2024 annual review. She called on the federal government to provide reliable and targeted funding.

In total, the cooperatives invested 611 million euros last year. This was an increase of 1.8 percent compared to 2023, but the majority was once again invested in maintenance and modernization.

According to the association, construction prices are no longer rising as drastically as in previous years. However, an increase of 3.3 percent for new buildings and 3.7 percent for maintenance remains noticeable, said Philipp.

Less new construction - "room for maneuver is getting tighter"

Only 46 million euros were available for new construction. This proportion is "unfortunately vanishingly small", said consultant Sven Winkler. "The leeway is getting tighter and tighter, and many cooperatives really have to actively look at how they can use the money wisely."

According to the figures, 195 new apartments were built - around 90 fewer than in 2023. In total, the cooperatives managed a good 294,000 apartments in Saxony, around 500 fewer than in the previous year.

The picture is similar for the Association of the Housing and Real Estate Industry (vdw) in Saxony. At around 639 million euros, investments were at a high level, as association director Alexander Müller said. However, output fell due to rising costs.

Just under half of the investment sum (around 300 million euros) went into maintenance, with a further third going into modernization (217 million euros). The social housing companies in the vdw invested 126.7 million euros in new builds, with 719 apartments completed. According to the figures, the portfolio thus amounted to around 310,000 apartments.

Vacancy is an economic problem

Vacancy is a persistent problem for both associations. This is not just an aesthetic problem, but above all an economic one, said Winkler. The approximately 25,000 vacant apartments cost the cooperatives 103 million euros per year, and this money is lacking for investments in existing and new construction.

The main reason for this is the lack of demand resulting from demographic change: "We simply don't have the people," said Müller. Although there has been a slight decline overall in recent years, the situation is particularly dramatic in rural areas.

For the vdw, Müller reports a vacancy rate of around 14 percent in rural areas compared to 4.4 percent in Leipzig, Dresden and Chemnitz. For cooperatives, the figure is around 12 percent in the countryside and 4 percent in the cities. "Problem children" are the districts of Görlitz, Zwickau and the Erzgebirgskreis, where between 13 and 20 percent of apartments are vacant.