Construction industry passes on higher prices

The construction industry is growing vigorously. Because so much is being built in many German cities that no stone seems to be left unturned. Housing construction in particular is picking up. Still, all of this is not enough.

More and more is being built in Germany, but it's still not enough.

Dhe building boom in Germany has intensified again. The industry raised its annual forecast on Wednesday to a year-on-year sales growth of 5.5 percent. At the beginning of the year, the construction industry had only expected a plus of 4.0 percent for 2018. “It is mainly due to the housing construction, which is still pulling,” said the managing director of the Central Association of the German Building Industry, Felix Pakleppa, on Wednesday in Berlin. A good two thirds of the growth, around 4 percentage points of the 5.5 percent, would come about by passing on higher material and wage costs to the end customer.

The construction industry expects about 300,000 homes to be completed this year, including 138,000 in apartment buildings, and 315,000 next year. This means that the goal of 375,000 new apartments a year formulated in the coalition agreement will not be achieved. That is also not possible under the current conditions, said Pakleppa.

Once again, he advocated increasing the tax depreciation for residential buildings from 2 to 3 percent. The limited special depreciation now planned by the federal government will initially support the construction of apartment buildings, but set “the time limits too tight” to be effective for longer. A depreciation of 5 percent annually over a period of four years is planned. The building application must be submitted by the end of 2021 at the latest. On September 21, representatives of the construction industry will meet for a “residential summit” with Chancellor Angela Merkel and Minister of Construction, Host Seehofer.