Increased construction and energy costs will lead to no new buildings in Thuringia in 2024

Increased construction and energy costs will lead to no new buildings in Thuringia in 2024

According to a report from www.mdr.de, Thuringian housing companies will forego half of all planned new buildings in 2024 due to increased construction and energy prices. This is expected to result in 300 to 400 fewer apartments being built. The Association of the Thuringian Housing and Real Estate Industry (VTW) has announced that the costs of energy and building materials as well as higher building loan interest rates are affecting investments in new buildings and maintenance. As a result, municipal and cooperative housing companies have already signaled that they will forego around half of their new buildings planned for 2024.

The increased costs can hardly be refinanced through socially acceptable rents. At the end of 2022, the average net rent in association apartments in Thuringia for a first rental per square meter ranged between 8.66 euros in rural areas and 9.23 euros in the cities of Erfurt, Weimar and Jena. However, in order to cover the costs of the investments, rents of 16 to 18 euros per square meter would have to be charged.

The impact of this development on the real estate market in Thuringia is significant. Due to the abandonment of half of the planned new buildings, fewer apartments will be available, which can lead to a shortage of living space in the long term. In addition, the increased rental costs could exacerbate the housing shortage in the region and make it more difficult to afford housing.

The latest developments in housing construction in Thuringia show that rising construction and energy prices are having a direct impact on the real estate industry. This could lead to long-term changes in the real estate market, particularly in terms of housing availability and prices.

Source:
According to a report by www.mdr.de.