Housing Construction Plummets—Saxony Loses Billions in Revenue

Last year, about 40 percent fewer apartments were built in Saxony than in 2023. (File photo) / Photo: Jan Woitas/dpa

According to a study, the slump in residential construction in Saxony has slowed the economy. The so-called Construction Monitor 2026 reports that approximately 3,800 fewer apartments were built in the Free State of Saxony in 2025 than two years earlier. This resulted in a loss of net revenue of just over one billion euros—equivalent to about 0.6 percent of Saxony’s gross domestic product in 2025. According to the study, the state lost 194 million euros in sales tax and 71 million euros in real estate transfer tax.

The Pestel Institute compiled the “Construction Monitor” on behalf of the Federal Association of German Building Materials Retailers. According to the report, approximately 84,600 fewer apartments were built nationwide. This corresponds to a net revenue loss of around 26.9 billion euros.

40 Percent Fewer Homes Built

In Saxony, 5,510 homes were completed in 2025, according to data from the State Statistical Office. The decline compared to 2023—1,447 fewer housing units in single- and two-family homes and 2,387 fewer in multi-family buildings—amounts to over 40 percent. According to Baumonitor, construction of approximately 385,000 square meters of living space was reduced.

At the same time, Saxony faces a shortage of 20,000 apartments despite the population decline. This is because, although fewer and fewer people live in Saxony, the number of households—and thus the demand for housing—is rising: While the population declined by 11.5 percent to 4.03 million between 1995 and 2025, the number of households rose by just under 11 percent to 2.16 million during the same period.

Housing costs are rising

Housing is also becoming increasingly expensive, but in Saxony the increase is significantly lower than the national average, as the study shows. The average net rent (excluding utilities) for a basic-standard apartment in Saxony rose by just under 37 percent from March 2015 to March 2026—the third-lowest rate in all of Germany, after Saxony-Anhalt and Thuringia. Nationwide, the increase was 53.5 percent.