Saxony increases funding for housing construction

Saxony wants to provide significantly more funding for housing construction this year. The Ministry for Regional Development announced in Dresden on Wednesday that an additional total of around 73 million euros could be used for social housing and the creation of residential property. Minister Thomas Schmidt (CDU) hopes that this will boost the construction industry. "The industry found itself in a very difficult situation last year because construction activity has increasingly come to a standstill due to high costs, high interest rates and high standards."

According to Schmidt, a remedy is therefore needed: "Because if companies give up or cut staff, the construction industry will permanently lose capacity that we urgently need in the coming years," he said, referring to a survey by the Eastern Construction Industry Association. According to the survey, 42 percent of companies assessed their current business situation as negative, compared to 25 percent a year ago. 44 percent of companies complained about a lack of orders, while 53 percent said the order backlog was unsatisfactory.

According to Schmidt, Saxony plans to provide 105 million euros for property promotion this year - around 26 million euros more than in 2023. The funds will be used firstly for the "Family Housing Directive", which supports families building or purchasing condominiums with low-interest loans of less than one percent and a 25-year fixed interest rate, depending on the number of children. Another new feature from April is the "Rural Home Ownership Guideline". It can also be used to support households outside of large cities without children with home ownership - through long-term loans with very favorable interest rates, it was said.

Almost 187 million euros are available for social housing this year - an increase of 47 million euros compared to the funds approved last year. The "Directive for tied rental housing" is used to promote the construction of new social housing in the two cities of Leipzig and Dresden. There is also a Saxony-wide guideline for affordable rental housing. With its help, existing housing can be renovated and then rented out as social housing. The prerequisite for both guidelines is that the apartments are only rented out to people who have a certificate of eligibility for housing.

"In addition to increasing the funds that we provide for the construction and renovation of housing, we have already taken a whole range of measures in the past year to support the construction industry in its difficult crisis," concluded the Minister. For example, we sought a close exchange with the construction and real estate industry and the skilled trades at an early stage. "We have tackled points that we can implement without the federal government," said Schmidt, mentioning the amendment to the building regulations in this context. Among other things, this allows loft conversions to be carried out without a permit.