The construction of residential buildings continues to become more expensive. But after a real cost explosion in the past two years, prices have recently risen somewhat less.
Anyone who wanted to build a new apartment in August had to spend 6.4 percent more money than a year before. The Federal Statistical Office reported this in its quarterly evaluation. Inflation is continuing – although the prices for building new residential buildings in Germany rose more slowly in August than they have in over two years.
Due to rising energy prices, supply bottlenecks and the war in Ukraine, building has recently become significantly more expensive. In February of this year, builders had to spend 15.1 percent more money than a year before. Prices continued to rise in May – by 8.8 percent compared to the previous year.
Costs for carpenters and woodworkers have fallen
Concrete work and masonry work account for the largest share of shell construction work and also of the overall index for new residential buildings. However, the costs for this have recently risen rather moderately. Concrete work was 0.2 percent more expensive compared to August 2022, and bricklayers had to pay 5.3 percent more. The costs for carpentry and wood construction work even fell.
However, economists point out that the current less drastic price increases are also related to a base effect. In other words: Since the cost level is already very high due to the price explosion in 2022, further price increases this year look comparatively lower.
According to experts, weak demand may also have had a dampening effect. Because of the increased interest costs, there have been many cancellations in construction.
There has recently been a significant decline in new orders in the construction industry. In September, according to a survey by the financial services provider S&P Global, it recorded the fourth largest decline in orders since data collection began in 1999.