The economic power behind housing

Residential construction has been a major contributor to Germany’s economic growth in recent decades. However, current forecasts point to a worrying decline in the real volume of residential construction, which could have far-reaching consequences. This development underlines the urgent need to strengthen residential construction as a driver of economic recovery.

The DIW Econs study, commissioned by the Housing association alliance, first measures the direct, indirect and induced economic effects of residential construction. In 2023, the gross value added associated with residential construction in Germany will amount to EUR 536.8 billion. This means that every seventh euro of gross value added in the economy as a whole is attributable to housing.

In addition, housing creates jobs and generates significant tax revenues. Almost 6.6 million people are employed directly, indirectly or induced by the housing sector. In addition, the economic activities associated with residential construction contribute around 140.8 billion euros to German tax revenues.

Residential construction also plays a crucial role in addressing environmental challenges, particularly with regard to achieving net greenhouse gas neutrality by 2045. By investing in energy-efficient buildings and using renewable energy, the sector can make a significant contribution to climate protection. At the same time, the housing sector is crucial for the provision of affordable housing and thus contributes to social cohesion.

The current decline in the volume of housing construction calls for a rethink and increased action. Housing must continue to be strengthened as a driver of economic growth and social justice.

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