Revival of Apartment Approvals in Bavaria's First Quarter
Approval granted for construction of additional dwellings in Bavaria - Approval granted for additional housing in Bavaria
Got some good news for those on the hunt for a new pad in Bavaria? After a string of rejections, the number of approved apartments escalated by nearly 10% in the recent quarter, bringing the total to 13,666. The State Office of Statistics broke the news, boasting a reversal from a not-so-rosy quarter one in 2022 when only 21,493 apartments were given the green light.
With construction costs, as per the Federal Statistical Office, not surging as madly post-Ukraine war, it seems the tide may be turning. But what's causing the rise? Let's peek beneath the surface.
The Rural vs. Urban Divide
While major city approvals nosedived by nearly a third, rural areas witnessed a 25% increase in new apartment approvals. This twist fits nicely with the trend in individual government districts: Upper Bavaria, Swabia, and Middle Franconia, which host the three largest cities in the state, saw falling approval numbers—a pattern repeated across many other regions.
But it's not all doom and gloom. In other districts, the numbers have soared. Case in point: Upper Franconia, where the approved apartments almost doubled to 949, starting from a meager base. Absolutely speaking, Lower Bavaria recorded the most significant increase with 705 approved apartments bolstering their count to 1,757.
A Closer Look at the Numbers
Before we get too excited, it's crucial to note that Bavaria's apartment approval trends in various regions are still somewhat of a mystery. But we can turn to broader perspectives on the housing market for context.
- Property Costs: Germany-wide property prices have rocketed over the past decade, with Bavaria averaging around €3,654 per square meter, but they saw a slight slump mid-2022.
- Rent Controls: Rent control measures, Mietpreisbremse, regulate some rentals but don't apply to new constructions or modernized properties, potentially affecting supply in urban areas.
- Urban vs. Rural Living: Cities tend to see greater demand, and thus higher prices, compared to rural areas. That said, detailed data on specific regions in Bavaria is hard to come by.
An Eco-conscious Future
Expect an increasing focus on eco-friendly and energy-efficient buildings to drive future apartment approvals across the region. Modernization of existing structures is also on the rise, enabling enhanced energy efficiency and potentially justifying rent bumps in certain conditions.
So there you have it—Bavaria's rural areas gain traction, while the urban scene remains in high demand. This shift could signal a trend toward a more balanced approach to housing development in the vibrant Bavarian heartland. Stay tuned for updates as we delve deeper into the housing markets of specific cities and rural districts.
- Despite the decrease in apartment approvals in major cities by almost a third, the numbers for single family homes, such as detached, semi-detached, and row homes, may see an increase due to the rise in rural areas, as indicated by the 25% increase in apartment approvals in rural Bavaria.
- With the surge in apartment approvals, particularly in regions like Upper Franconia (with a 949% increase) and Lower Bavaria (with a 40% increase), it might be essential for investors to consider purchasing buildings to construct or refurbish, and these building projects would require the necessary building permits for both housing dwellings and real-estate development.
- The finance sector may find opportunities in investing in the construction of housing dwellings in regions such as Upper Franconia, as initial bases for building approvals can be significantly lower compared to other regions, like major cities where costs could be higher.
- For those considering moving outside urban areas, the revival of apartment approvals in rural Bavaria, which has shown a 949% increase in approvals in the recent quarter, might precisely provide more housing options, such as apartments, in the region, adding to the inventory of dwellings available in these areas.
