Strongest rise in construction prices since 1970

Status: 10.01.2022 09:36 a.m.

The price of new residential buildings in Germany rose more sharply in November than it has been in over 50 years. The main reason is the sharp rise in the price of materials such as wood or insulation.

Building new apartments in Germany is becoming more and more expensive. In November prices rose more sharply than they have been since 1970. They increased by 14.4 percent compared to the same month last year, as reported by the Federal Statistical Office. According to the information, a stronger increase was last measured in August 1970 with 17.0 percent compared to the same month of the previous year.

The main reason was the sharp rise in the price of building materials such as wood, steel and insulation materials. Carpentry and wood construction have risen particularly sharply, the prices of which shot up by 38.9 percent due to the increased demand for construction timber at home and abroad. The prices for sewer work rose by 18.2 percent, for roofing and roof waterproofing work by 17.1 percent and for plumbing work by 16.8 percent. Concrete work went up by 16.5 percent. Overall, the prices for structural work on residential buildings rose by 15.7 percent from November 2020 to November 2021 – three times as fast as consumer prices in general.

The withdrawal of the temporary VAT cut also turned out to be a further price driver. The regular rates have been in effect again since January 2021, so goods and services have tended to be more expensive year-on-year. Without the VAT effect, according to statisticians, construction prices would have risen arithmetically by 11.6 percent in November 2021.

Little relaxation in December

In the meantime, the material shortage on the construction sites has eased a little. In building construction, for example, 31.3 percent of companies complained of delivery problems in December, after 34.5 percent in the previous month, as the ifo Institute found out in a survey. “The considerably higher material prices put the construction companies under additional pressure,” said Ifo expert Felix Leiss. “In building construction in particular, the companies are planning to pass the costs on to the builders in the coming months.”

Nevertheless, according to the trade president Hans Peter Wollseifer, the situation remains tense. “Private customers wait longer for craftsmen and pay significantly more,” he said recently. “Building will become more expensive in the future, not just because wages are rising, but because the prices for materials are rising. Because it is already becoming apparent that prices – even if the material shortages are eased – will not completely fall back to the pre-crisis level . “

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