The order books in residential construction are still full to bursting. But the exploding construction costs, higher interest rates and poorer funding opportunities are putting more and more projects in doubt. Many projects have been cancelled. "We have been observing a wave of cancellations since April 2022," says Ifo researcher Felix Leiss. The number of building permits is also declining.
The material bottlenecks - which had worsened drastically with the Russian invasion of Ukraine - are only slowly easing. In July, 45.6 percent of the companies in the residential construction sector still reported delivery problems. In the previous month, the proportion had been 47.6 per cent. "As a result of the shortage and the high energy costs, many building materials have become considerably more expensive. The construction companies have therefore had to keep turning the price screw themselves," adds Leiss.
The situation in construction also affects the number of building permits. In June 2022, the construction of 30,425 flats was approved in Germany. As reported by the Federal Statistical Office, this was 4.5 percent or 1,419 building permits less than in June a year earlier. In H1 2022, 2.1 per cent fewer building permits for dwellings were issued than in the same period last year. The results include building permits for flats in new buildings as well as for new flats in existing buildings.
The number of building permits for single-family houses decreased by 17.0 percent to 41,765. The number of approved flats for two-family houses rose by 1.6 percent to 16,622 and for multi-family houses by 7.8 percent to 99,755.
One of the most important concerns of the Federal Government in terms of construction policy is to enable all citizens to have permanent access to affordable and climate-friendly housing. "For this, we need a significant demand-based and sustainable increase in supply, because shortages always lead to higher prices," said Federal Minister Klara Geywitz on the occasion of Construction Industry Day. The coalition has agreed on the goal of building 400,000 flats per year, 100,000 of them publicly funded. This target will be difficult to achieve under the current circumstances.
(Photo: © Annca Pictures, Pixabay)
