OREANDA-NEWS. New home construction is expanding in 2013 as well. In the current year, up to 204,000 new homes are likely to be built in Germany according to the forecast by KfW in the framework of its current Indicator Own Home Construction. Thus, the 200,000 mark will be surpassed for the first time since 2006.

The slight decline in the KfW Indicator Own Home Construction at the end point does not change the forecast for a continuing upwards trend. In December 2012, 34.7% of borrowers supported in the framework of the KfW Home Ownership Programme were planning a new construction or the purchase of a newly constructed owner-occupied home - that is 1.4 percentage points less than the previous month. The framework conditions remain favourable: mortgage rates are low, the labour market is robust, and wages and salaries are increasing. At the same time, investors continue to show a strong preference for investments in material assets. Early indications from official data such as orders in housing construction and permits for new construction confirm this positive outlook.

Price developments on the German housing market are trending upwards and are not likely to be slowed down by the increasing number of new builds in 2013. Overall, the price increase is still moderate, even in international comparison. However, if one looks at the development in individual locations, particularly in conurbations, some indicators hint at slight tendencies of overheating.

Dr Jorg Zeuner, Chief Economist of KfW Bankengruppe, commented on the current KfW Indicator Own Home Construction as follows: "Investing in one's own home remains attractive in 2013 as well. Overall housing construction in Germany benefits from this. For the current year, we expect more than 200,000 new home constructions for the first time since 2006. Thus the trend of the past years is continuing. Nevertheless the current level of new housing construction is not sufficient to meet the continuously rising demand for housing, in particular the demand for senior-friendly and energy-efficient housing."