More apartments, but not enough
There have not been enough new builds this year to lower house prices and rents. The construction industry is pushing for changes in the law.
Not enough apartments will be built in 2018 to reduce pressure on the real estate market. „We should create around 300,000 apartments in the current year,“ said Reinhard Quast, President of the Central Association of the German Construction Industry. Last year, 285,000 apartments were built. Next year, the number will rise to 315,000 to 320,000. Union and SPD had agreed in the coalition agreement to create 1.5 million new homes by 2021. This corresponds to 375,000 units per year.
For builders it is getting more expensive. After an increase of 3.6 percent in the previous year, construction cost another 4.5 percent more this year, as the president of the German Construction Association, Peter Hübner, said. The order books of the construction companies are as full as ever. With a value of 47.6 billion euros, the order backlog in September was 14 percent above the strong prior-year figure. In some places it is difficult for builders to find a business, as Hübner acknowledged. Companies also chose stronger, for which tenders they submit offers.
Apartments are considered a good investment given low interest rates. Industry, federal and state governments are investing more in new buildings, roads and railways.
In order to further increase the new building, further tax relief is needed from the point of view of the construction industry, as well as more favorable building land and model houses, which only have to be developed and approved once, but can be built many times over.
In addition, building materials such as reinforcing steel and bitumen have become significantly more expensive. „You do not have to believe that rising prices directly serve the margins of construction companies,“ said Hübner. The companies are finally able to price their risks appropriately. The companies are therefore continuing. The number of employees in the industry has increased to 832,000 this year, next year, the companies expect another 18,000 shots.
Economic concerns are not yet affecting the construction industry, they said. For this year, the building associations expect a sales increase of 6 percent, which equates to a price-adjusted 1.5 percent. Next year, 6 percent and 1 percent respectively are expected.
