German Home Construction Seen Increasing to Highest in 12 Years

German home construction will rise to the highest in 12 years in 2014 as an increase in the country’s workforce and low borrowing costs fuel demand, according to two industry groups.

About 250,000 residential properties are expected to be completed, the ZDB and HDB construction associations said in a statement today. That’s in line with a government target.

“The upward trend in home construction is based on a need for catching up, as well as robust employment data and rising incomes,” the groups said in the statement.

German home construction in big cities has been lagging behind demand as the population grows and people move to areas where jobs are easier to find. The government says 250,000 new homes are needed each year.

Investment in home construction will rise by 5 percent to 35.3 billion euros ($48 billion) this year, the associations said. That will lift spending on all development projects in Germany to about 98.6 billion euros, 3.5 percent more than in 2013.

In 2013, Germany built 225,000 homes with an investment volume of 33.5 billion euros.

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