Housing construction in crisis: Financial experts warn of bleak prospects and an increasing lack of orders

Housing construction in crisis: Financial experts warn of bleak prospects and an increasing lack of orders

According to a report from finanzmarktwelt.de, there is a bleak outlook for housing construction in Germany. Interest rates at the ECB remain at 4.5% for the time being, which is leading to problems with loan extensions and new, more expensive interest rate contracts. More and more borrowers are having difficulties, which is exacerbating the housing crisis. Data from the Ifo Institute shows that more and more housing construction companies are complaining about a lack of orders. In addition, order cancellations play a major role and customers are dropping out in droves. Construction costs and high interest rates cause problems, meaning many projects are no longer profitable and have to be postponed or canceled. The mood remains icy and the business climate is at its lowest level since the survey began in 1991. Financing difficulties are increasing and there is no improvement in sight.

These developments in housing construction have far-reaching effects on the real estate market. Demand for new construction projects could fall further as builders hesitate to start new projects given rising construction costs and interest rates. This, in turn, could lead to a decline in building permits and a shortage of available housing, which would further strain the housing market. In addition, construction companies specializing in residential construction could face lost sales and financial difficulties, which could ultimately lead to a decline in employment in the sector.

Overall, current developments point to a tense situation in housing construction and possibly also to a long-term crisis in the real estate industry. It remains to be seen how the situation will develop and whether policy measures will be taken to support housing construction.