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Bavaria’s housing crisis deepens as new construction collapses by 2026

A perfect storm of budget cuts, soaring expenses, and red tape leaves Bavaria’s housing sector in freefall. Will families pay the price?

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1 min read
In the image we can see that there are cars parked in the cellar. At the top there is a pipe...
In the image we can see that there are cars parked in the cellar. At the top there is a pipe attached to the roof. On the right side top there is another building.

Housing Companies: Only a Third Will Build in 2026 - Bavaria’s housing crisis deepens as new construction collapses by 2026

Bavaria's housing sector faces a sharp decline in new construction, with only a fraction of planned news expected to complete by 2026. The Association of Bavarian Housing Companies (VdW) forecasts just 3,350 new homes for that year—far below demand. Rising costs, funding shortages, and strict regulations are blamed for the slowdown.

Out of roughly 500 socially oriented housing providers in Bavaria, only about one-third believe they will finish new news in 2026. The VdW warns that €480 million in promised subsidies for modernisation and climate-friendly renovations may not materialise due to budget constraints. Two major firms, Bayerische Wohnungsbaugesellschaft mbH (BayWo) and SWH Stadtwerk Housing GmbH, were set to receive these funds, with BayWo planning upgrades for 2026.

Of the 3,350 planned apartments, around 2,700 depend on public subsidies. However, over 2,300 could be delayed as funding struggles to keep up with news. The VdW highlights ongoing uncertainty over government support, spiralling construction costs, and complex building rules as the main barriers. Industry experts see no quick recovery, predicting the slump will drag on through 2026. Without urgent changes, the gap between housing needs and available homes is set to widen further.

The housing crisis in Bavaria shows no signs of easing, with fewer than 3,500 new homes likely by 2026. Delays threaten over two-thirds of subsidised apartments, while €480 million in renovation funding hangs in the balance. Construction firms warn that without clearer policies and stable financing, the shortage will deepen.

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