Institute warns of decline in new housing construction

Stuttgart/Düsseldorf (dpa) – Before the building ministers’ conference of the federal states this Thursday in Stuttgart, the German Economic Institute (IW) warned of a decline in newly completed apartments this year and next. “The goal of 400,000 new apartments per year is further away than before,” said IW expert Michael Voigtländer of the “Rheinische Post” (Thursday).

Many project developers are currently waiting or postponing construction projects. On the one hand, the development of construction prices is very volatile and unpredictable, on the other hand, demand has fallen sharply. Institutional investors are currently buying hardly any real estate, capital investors and owner-occupiers are also unsettled and will first have to adapt to the new interest rate situation: “It is therefore very likely that construction activity will decline this year and especially next year.”

It is now important to look for solutions together to reduce construction costs. In addition, it should be easier to make adjustments to building permits in the current situation.

© dpa-infocom, dpa:220922-99-853362/2

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