Why building is way too expensive

In addition to rents and the price of building land, construction costs are also rising steadily. The state is largely to blame for this because it imposes excessive regulations.

Building land, building materials, construction workers - everything is getting more expensive

IBuying real estate has become expensive. Everyone knows that by now. But having them built is also becoming more and more expensive. That doesn’t seem surprising, because the prices for building land are also climbing rapidly. In cities, they have more than doubled since 2010. On the other hand, it is often overlooked that construction costs are also constantly rising. This affects the home buyers, but also the tenants, who have to pay for it through their rents. The state is largely to blame for this.

On average, it now costs 30 percent more to build an apartment than in 2010. On the one hand, this is due to the fact that the companies involved want to earn more in the current building boom and can achieve this through higher prices. The fees paid to architects and engineers have risen by more than a third, and construction companies are treating themselves to more profit. Their margins have climbed from 4.7 percent in 2005 to around seven percent. But that is only half the truth. The costs of the construction companies that pass these on have also increased significantly. The staff earn more, here too there is a lack of skilled workers who have to be attracted with higher wages. The average earnings of skilled workers were raised by six percent in 2018, the minimum wage by four percent – and thus far more than in the rest of the economy.