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In response to rising rent and property prices in Germany’s major centres, Chancellor Angela Merkel on Friday pledged government action to increase the supply of housing.

“We intend to undertake a major effort to reach our target of more homes,’’ Merkel said after chairing a government summit in Berlin on the growing housing crisis.

“This is one of the more important social issues,’’ she added.

The government recently announced a substantial annual subsidy to families with children to allow them to buy or build their own homes.

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Fiscal measures, federal land provisions and the construction of more social housing have also been announced.

The aim is to build up to 1.5 million new homes in the coming years.

Interior Minister Horst Seehofer described the summit as a “very clear signal,’’ with the aim of reducing housing costs by increasing supply.

He also pledged to cut red tape to facilitate house building.

Finance Minister Olaf Scholz, who also attended the summit, said: “We need more affordable homes.’’

The Social Democrat politician noted that basic rents of 12 dollars and more per square metre in certain cities pushed ordinary workers to the limits of their financial capacities.