Ambitious goals unattainable
Housing construction is stagnating massively due to a shortage of materials
08/11/2022, 09:20 am
The wave of cancellations in new residential construction does not stop. Material bottlenecks are only slowly easing, and prices will probably continue to rise. The Ifo Institute therefore rejects the “ambitious new construction targets of the federal government”.
According to Ifo surveys, many residential construction projects have been canceled since April due to material shortages. In June, the proportion of companies reporting this was 12.3 percent, in July it was 11.5 percent, according to the IFO Institute in Munich. “Explosive construction costs, higher interest rates and poorer funding opportunities are calling more and more projects into question. We’ve been seeing a wave of cancellations since April,” explained IFO researcher Felix Leiss. “The ambitious new construction targets of the federal government are thus moving into the distant future.”
The material bottlenecks – which had drastically worsened with the Russian invasion of Ukraine – are said to be only slowly easing. In July, 45.6 percent of housing construction companies were still complaining about delivery problems. In the previous month, the proportion was even 47.6 percent. “As a result of the scarcity and the high energy costs, many building materials have become considerably more expensive,” said Leiss. “Construction companies therefore had to keep turning the price screws themselves.”
The development is currently losing momentum. Nevertheless, a large number of those surveyed still expect renewed price adjustments in the coming months: the barometer for price expectations was 54.0 points, after 61.5 points in the previous month. “At the same time, however, the higher interest rates and the limited funding opportunities in residential construction are weighing on the demand for construction services,” said Leiss. “The mood is changing on the construction site,” said Leiss. Many companies feared a downturn in business over the next six months.
In its coalition agreement, the ruling traffic light coalition has set itself the goal of building 400,000 new homes in Germany every year. 100,000 of these should be social housing. According to the Federal Statistical Office, 293,000 new apartments were built in Germany last year, a decrease of 4.2 percent compared to the previous year.