Thursday, October 07, 2021
Material boom on world markets
Strongest construction price increase in 50 years
Anyone who wants to build a house in Germany currently has to dig deep into their pockets. Because it is not only the prices for building materials on the world markets that are skyrocketing. The withdrawal of the corona-related VAT reduction is now having a full impact.
The construction of new apartments in Germany has become more expensive in August than it has been since 1970. The prices for the new construction of conventionally manufactured residential buildings were 12.6 percent above the level of the same month last year, as reported by the Federal Statistical Office in Wiesbaden. According to the information, a stronger increase was last measured in November 1970 with 13.1 percent compared to the same month of the previous year.
Currently, among other things, the great demand for building materials such as wood, steel and insulation on the world markets is driving prices. Carpentry and wood construction rose in price above average in August. Due to the increased demand for construction timber at home and abroad, prices rose by 46.5 percent compared to the same month last year.
In addition, the withdrawal of the temporary VAT cut is now having a full impact. In order to stimulate consumption in the Corona crisis, the federal government had temporarily reduced VAT from July 1, 2020 to December 31, 2020.
The regular VAT rates have been in effect again since January 2021, so goods and services tend to be expensive. Without the VAT effect, the construction prices would have risen by 9.7 percent in purely arithmetical terms.