The construction sector ranks among Germany’s most significant industries, encompassing approximately 360,000 companies and employing roughly 2.6 million people. With annual revenues of about €430 billion, the sector accounts for nearly 11% of Germany’s GDP in construction-related investment.

The market is primarily driven by residential construction, approximately 60% of all investments in 2024. However, after 2020, investment has declined and the country has consistently fallen short of its targets.

The construction sector accounts for one of Germany’s largest environmental footprints. A few facts:

• Construction and demolition materials account for roughly 54% of the country’s total waste (including 40% of timber waste).

• The sector accounts for approximately 40% of all greenhouse gas emissions in Germany (considering production, construction, and operation).

• Germany's current renovation rate of 1% must triple to 2-3% to meet climate objectives.

Households allocate, on average, 20% of their income to rent. This is substantially lower than in other countries (approximately 34% in the UK, 27% in Spain, and around 23% in both France and Austria). In the ownership market, 50% of tenants identify affordability as the primary barrier to buying a home.

Enforcement of labour laws remains a challenge, with reports of seasonal workers being paid below the minimum wage, illegal employment or minimum wage violations.

Sustainable construction is increasingly measured through certification systems such as DGNB, BNB, LEED, and BREEAM. While these systems are widely adopted in the commercial sector—where over 70% of institutional investment now flows into certified buildings—the residential sector remains largely unaddressed.

In 2024, Germany saw investments of € 284.2 billion in constructing and renovating buildings, making it the largest market in Europe. The residential market accounted for 71%, while the non-residential market made up 29%.