The real estate expert Reiner Braun, CEO of the analysis and consulting company Empirica, spoke in an interview about the construction crisis and the reasons for it.
“That was the death of housing construction”
“Interest rates have risen to four percent. It used to be eight percent and that’s when construction took place,” Braun told
Ntv
“. “We have to get used to the new, actually normal, interest rate level. A lack of building land and increasing requirements have been driving prices up for years.”
For him, something else is to blame for the declining numbers of newly built apartments. The lack of building land and increasing requirements could be compensated for by low interest rates. But: “Then the material costs suddenly rose sharply due to the pandemic and the war in Ukraine, and construction interest multiplied. That was the death of housing construction,” Braun told Ntv.
Construction crisis: prices for new buildings rise by 15 percent within a year
According to statistics, prices for new residential buildings have risen by 15 percent in one year. In February, they were exactly 15.1 percent higher than in the same month last year, as the Federal Statistical Office in Wiesbaden announced on Thursday. Compared to November, prices climbed by 2.7 percent.
According to statistics, the shell construction work increased by 13.7 percent within a year – concrete work was 15.2 percent more expensive, masonry work by 12.7 percent. Roofing work cost 17.1 percent more, carpentry and timber construction work only 3.0 percent.
Prices also rose sharply for finishing work: carpentry work, for example, was 17.3 percent more expensive, heating systems and water heating systems by 18.2 percent.
The traffic light is a long way from the self-imposed construction goal
At the beginning of February, the statistical office also reported significant price increases for almost all building materials. The Federal Building Ministry said that building prices in residential construction are expected to rise by six percent in the current year and by 2.5 percent in the coming year.
The traffic light government had declared 400,000 newly built apartments per year as a target. But Germany is a long way from that: last year it was an estimated 250,000, and in 2023 it doesn’t look like 400,000 new apartments will be feasible. “I don’t think the figure of 400,000 apartments in achievable in 2022 and 2023,” said Federal Building Minister Klara Geywitz in January.
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