* Residential building permits fall 7 pct on the year
* First yearly drop in a quarter since 2012
* Data suggests construction boom could peter out
* Against trend, approvals for apartment buildings rise
(Adds quotes, data details, reaction from construction
By Michael Nienaber
BERLIN, May 18 Residential building permits
issued in Germany fell around 7 percent on the year in the first
three months of 2017, data showed on Thursday, suggesting the
construction boom in Europe's biggest economy could lose
momentum in coming months.
Home building has become a key driver of economic expansion
in Germany as a growing population, increased job security and
record-low borrowing costs are propelling demand for real
Higher state spending on roads, bridges and social housing,
also to accommodate a record influx of refugees over the past
two years, are giving construction an additional push.
But data released by the Federal Statistics Office showed
German authorities issued 5,600 fewer residential building
permits in the first three months of the year compared with the
first quarter of 2016.
"This means that the number of approved dwellings fell for
the first time on the year since the first quarter of 2012", the
A breakdown of the data showed permits were issued for
70,232 new dwellings and construction work was approved for
8,919 existing buildings in the first quarter.
The total of 79,151 permits represented a year-on-year fall
of 6.6 percent, suggesting that construction and furnishing
firms could expect less orders in the coming months.
Approvals for the "hostel residences" sub-category, which
also includes shelters for asylum seekers, edged up 2 percent on
the year to 5,264.
In the "apartment building" sub-category, viewed as crucial
to avert housing shortages in urban areas, the number of
approvals rose by 5.5 percent to 37,601, the highest level
recorded in a first quarter in 20 years, the office said.
In 2016, new residential building permits issued in Germany
jumped by more than 20 percent on the year to reach a
17-year-high at 375,400 units.
"We're talking here about a slight decline from a very high
level," Andreas Geyer from the ZDB construction association
He pointed out that construction measures on existing
buildings fell in particular, which was due to the very high
"The trend is still pointing upwards, especially for
apartment buildings. And that's the development we need to
counter housing shortages in big cities. So it is too early to
talk about a trend reversal in the construction sector."
Geyer said the association would stick to its forecast.
The ZDB and other construction industry associations said in
January they expected sales to rise by 5 percent this year to
hit the highest level since 1995, following growth of 5.8
percent in 2016.
Higher investment in buildings contributed to a quarterly
growth rate of 0.6 percent in the first three months of 2017,
the Federal Statistics Office said last week.
Construction also drove economic growth last year,
contributing 0.3 percentage points to a GDP expansion of 1.9
percent last year, the strongest rate in half a decade.
(Reporting by Michael Nienaber; editing by Jeremy Gaunt)