Germany expected to scrap plan for tougher building rules – DW – 09/25/2023

September 25, 2023

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The German government was on Monday expected to put plans to mandate stricter building insulation standards on indefinite hold.

News of the expected move comes ahead of a crucial meeting of building industry and government leaders with Chancellor Olaf Scholz on Monday in the face of a depressed construction and housing industry.

What we know so far

The government is understood to have agreed a set of measures to bolster residential construction. These include a waiver of the EH-40 energy-saving standard, according to a 14-point paper seen by AFP.

EH-40 — which means a requirement of 40 percent of the energy of a comparable new building — was agreed by the coalition for 2025.

“In view of the current difficult conditions in the construction and housing industry due to high interest rates and construction costs, the anchoring of EH-40 as a mandatory legal standard for new buildings is no longer necessary in this legislative period and will be suspended,” various reports cited the paper as saying.

“High interest rates and inflation are a heavy burden for the construction industry,” the Reuters news agency quoted German Environment Minister Robert Habeck as saying on Monday. The minister noted that insulation measures, which the building industry says would dampen an already depressed market, “can wait.”

“I don’t see this new standard being introduced in this legislative period,” Habeck was reported as saying.

An ailing industry

The plan had drawn harsh criticism from the construction industry for months because of a steep rise in construction costs.

In the phase of low interest rates, ever higher standards had been developed at the federal, state and local levels, Federal Construction Minister, Klara Geywitz(SPD), said on ARD’s “Morgenmagazin.”

“Now all three levels of government have to understand: We have to lower the standards and bring down the costs.”

In a bleak sign for the property market in Germany, housing prices plummeted by the most since records began in the second quarter, government data showed on Friday.

Meanwhile, last week’s data showed that building permits for apartments in Europe’s largest economy fell 31.5% in July from a year earlier as a fall in demand hinders the industry.