Construction Costs Mark Highest Increase Since 2007

In relation to the previous year, recorded building costs reach the strongest growth in eleven years and increases the costs for building owners. The causes are diverse.

The construction industry will likely face no droughts in regards to future building projects. (Source: pexels.com)

According to a recent press release by the Federal Statistical Office (Destatis), 2018 had the strongest rise in building costs compared to the previous year: 4.6 percent since August 2017. The agency notes that this marks the strongest increase within one year since November of 2007 (back then 5.7 percent compared to November 2006).

Also in relation to office buildings (+4.7 percent), commercial operations building (+4.8 percent) and road construction (6.7 percent), a continuous rise has been recorded between 2013 and 2018 – even if the latter one experienced drops between 2014 and 2016. A similar development has been observed in regards to maintenance prices: Costs grew by 4.1 percent for the initiators.

There’s a variety of reasons for this development: Aside from high demand and therefore companies working at high capacity, construction material costs rose. Additionally, the Federal Association of German Housing and Real Estate Enterprise reports that the number of regulations more than quadrupled since 1990, which increased the effort for building projects. Some of these are noise control and fire safety, as well as energy saving regulations and accessibility.

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