Housing permits rise 13.8%
Germany approved construction of 21,600 homes in June, 13.8% more than a year earlier, according to fresh data from Statistisches Bundesamt.
The good thing is that this is becoming a trend rather than a one-month anomaly. Across the first half of 2026, 126,300 homes were approved, up 15.1% year-on-year. May permits had already jumped 24.7%.
There is still a large caveat. A permit is not a completed apartment, and the absolut construction level remains low compared with Germany’s housing needs. So this isn’t likely to produce lower rents anytime soon.
German economic confidence improves more than expected
Germany’s ZEW investor-sentiment index climbed to 34.2 points in August, beating economists’ expectations of 30.5 and rising from 25.4 in July.
The assessment of Germany’s current economic situation also improved. That fits with the pattern we’ve seen recently: German industrial production, exports, business surveys and now investor confidence have all moved in a better direction.
For expat workers, I would interpret this as evidence that the economic bottom may be behind Germany, rather than evidence that hiring has suddenly become easy.
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German bond yields hit a 15-year high
Germany’s 10-year government bond yield reached 3.261% on Tuesday, its highest level in roughly 15 years. Longer-term borrowing costs have risen sharply across Germany, the US, UK and Japan.
Why should someone who doesn’t own bonds care?
Mortgage pricing is heavily influenced by longer-term market interest rates. Rising Bund yields make it harder for banks to offer substantially cheaper fixed-rate mortgages.
The move is being driven by a combination of many factors: Defence & Infra spending, Higher Oil prices etc.
For prospective homebuyers: yesterday’s bond move is another reason not to build your affordability calculation around an assumption that German mortgage rates will soon return to 1-2%.
€19 billion funding gap remains the underlying issue
Germany’s pharmaceutical industry is pushing back strongly against government plans to reduce healthcare spending.
The government is trying to close an estimated €19 billion funding gap in the statutory health-insurance system, with measures including higher compulsory manufacturer rebates on patented medicines. Pharmaceutical companies argue the changes could reduce investment and clinical research in Germany.
I think that if Germany cannot control GKV spending, further increases in the Zusatzbeitrag would directly reduce your take-home pay.
Check debt-collection letters before paying
Same as in the last weeks newsletter, I want to point you to mail scams again. Germany’s Verbraucherzentrale Brandenburg updated its blacklist of fake debt-collection demands on 18 August. Fraudsters send apparently official Forderung/Inkasso letters and emails instructing recipients to transfer money to specified bank accounts.
Receiving an official-looking Inkasso letter does not automatically mean the claim is legitimate. Before paying, verify the company, creditor, underlying invoice and IBAN independently.
Market Review
|
Market proxy |
Daily change |
Quick interpretation |
|---|---|---|
|
MSCI World |
−0.84% |
Global equities moved lower as higher yields and weaker risk appetite weighed on markets. |
|
S&P 500 |
−0.74% |
US large caps pulled back as investors became more cautious after recent highs. |
|
Nasdaq-100 |
−1.69% |
Technology sold off more sharply as investors reduced exposure to highly valued growth stocks. |
|
Germany |
−0.61% |
German equities declined but held up better than US technology. |
|
Euro Stoxx 50 |
−0.80% |
European large caps weakened as bond-yield and inflation concerns remained in focus. |
|
Emerging Markets |
−2.92% |
Emerging markets underperformed sharply as global risk appetite weakened. |
Market mood
The sell-off is being driven less by fears of an immediate recession and more by the cost of money.
Long-term government borrowing costs have surged globally. US 30-year Treasury yields briefly moved above 5%, while Germany’s 10-year Bund yield reached its highest level in 15 years.
Bottom Line
Germany finally has some encouraging housing data. Permits rose 13.8% in June and 15.1% across H1, but translating permits into actual apartments will take time.
German economic confidence is recovering-the ZEW index jumped to 34.2 but the improvement hasn’t yet translated into an equally strong labour market.