The economic disruptions in the construction sector are being reflected with growing intensity in insolvency statistics. According to a recent study by Prognos AG commissioned by Bauherren-Schutzbund e. V. (BSB), the number of registered property developer insolvencies nationwide climbed from 141 cases in 2022 to 309 in 2025. This represents an increase of around 119 per cent. Prognos expert Dr Andreas Sachs presented the figures on the occasion of the BSB Construction Policy Forum in Berlin.
The study is based on datasets from North Data and records a total of 1,414 insolvencies in this segment for the period from 2018 to 2025. The total volume is thus around 20 per cent higher than official figures from the Federal Statistical Office, as the analysis also includes companies that carry out property development activities alongside their primary core business. The evaluation confirms a continuous increase in insolvency activity that began in 2023 and continues unabated.
Increase in major insolvencies weighs on completion rate
Most striking is the structural shift since the turnaround in interest rates: well-capitalised and large-scale project developers are increasingly running into difficulties. While the share of insolvencies with liabilities of at least EUR 7.5 million was around five per cent until 2022, this figure had already reached around 14 per cent of recorded cases with corresponding financial data in 2025. Moreover, liabilities per insolvency case between 2022 and 2025 were on average 82 per cent higher than in the years 2018 to 2021.
The failures are hitting the housing market hard. BSB Managing Director Henrik Fork-Weigel emphasised in Berlin that the actual scale of imminent developer insolvencies exceeds previous assumptions, with no easing of the situation in sight for the time being. If large-scale projects in the highest size bracket fail, this leads to a three to five per cent decline in newly completed housing in an average district, according to the study. Private purchasers often face existential risks because instalment payments are made according to construction progress, yet ownership of the land remains with the developer until final title transfer.
BSB urges statutory reforms in property development law
In light of growing risks arising from ongoing financing and rental costs as well as uncertain completion costs, the BSB is pressing for prompt legal improvements. Although a working group at the Federal Ministry of Justice and Consumer Protection put forward proposals back in 2019, and the evaluation of the construction contract law reform published in 2026 confirms this need for change, implementation is still pending.
- —Reintroduction of the right of partial termination by deleting the reference to Section 648a BGB in Section 650u (2) BGB, enabling purchasers to terminate the works contract portion for good cause and award remaining work independently without losing their priority notice of conveyance.
- —A statutory requirement to secure instalment payments, optionally through 96.5 per cent of the purchase price falling due only upon readiness for occupancy and handover.
- —Alternatively, the retention of staggered instalments under the Real Estate Agent and Commercial Contractor Regulation in combination with a legally guaranteed and secured claim for reversal of the transaction in the event of insolvency.
Fork-Weigel called on the Federal Government to swiftly translate the mandate set out in the coalition agreement regarding protection against developer insolvencies into binding legislative initiatives, in order to provide lasting stability for the confidence of private clients and investors in residential construction.
