Construction prices in Germany rise significantly more sharply in May than recently

Which trades became particularly more expensive

The increase in interior finishing work was also above average. "Ausbauarbeiten kosteten im Schnitt 5,1 Prozent mehr als vor Jahresfrist," the Federal Office announced. "Hier erhöhten sich die Preise für Heizanlagen und zentrale Wassererwärmungsanlagen - darunter zum Beispiel Wärmepumpen - um 5 Prozent." Metal construction work became 4.4 percent more expensive.

Concrete work and masonry work account for the largest share of new residential building construction. These two trades became 3.6 percent and 3.8 percent more expensive, respectively. Although they are below the overall average, they contribute significantly to the overall price increase due to their high weighting.

Office buildings and road construction also affected

It is not only residential construction that is affected. "Gestiegen sind auch die Neubaupreise für Bürogebäude: Sie verteuerten sich im Mai um 5,2 Prozent, gewerbliche Betriebsgebäude um 5 Prozent." In road construction, prices climbed by as much as 6.2 percent.

The real estate association GdW views the development with concern. "Der Immobilienverband GdW fürchtet wegen der hohen Baukosten einen Einbruch der Investitionen bei Neubauten," it says in a statement. "In diesem Jahr dürften demnach bundesweit nur noch 200.000 Wohnungen fertiggestellt werden."

GdW warns of collapse in new construction investment

According to the association's assessment, the need is significantly higher. "Der Bedarf liege aber bei rund 320.000 Einheiten pro Jahr," the GdW explained. The gap between demand and actual building completions is thus continuing to widen.

The statisticians also point to a structural problem: "In Deutschland werden deutlich weniger Wohnungen gebaut als dies vor allem in Großstädten nötig wäre." The continuously rising construction costs are considered one of the main obstacles to more new construction.

In view of the accelerated price increases, the pressure on builders, investors and ultimately also on tenants is likely to continue to increase. Should the trend continue, market observers expect further rising rents and purchase prices, particularly in major cities, where demand already exceeds supply.

The next data on the development of construction prices will be published by the Federal Statistical Office as scheduled in August. Observers expect that the increase will at least not weaken as long as material, energy and labor costs remain high.