Construction industry expects massive slump in residential construction

Munich According to industry associations, residential construction in Germany is on the verge of a slump in 2023. The main reasons are a lack of materials and a rapid increase in costs caused by the corona pandemic and the war in Ukraine.

This makes the costs of new construction projects unpredictable for both the contracting housing company and many executing construction companies and craftsmen, as is unanimously said in the housing and construction industry. “There will be slumps, and very significant ones at that,” says Hans Maier, director of the Association of the Bavarian Housing Industry (vdw), the German Press Agency.

This agrees with the assessment of the North German sister association VNW: “86 percent of the housing cooperatives and socially oriented housing companies in North Germany currently assess the prospects for new construction as bad or very bad,” says a VNW spokesman in Hamburg.

“That’s why 60 percent want to postpone the start of new construction projects or are still unsure.” Both associations mainly represent socially oriented landlords such as cooperatives and municipal housing companies.