Residential Construction Day 2019: More New Constructions in Central Locations

Not only for quantitative increases, but also in regards to the location, there need to be better conditions for new constructions, say representatives at this year’s Residential Construction Day conference in Berlin. Now, the state is in demand.

An obvious solution to the housing shortage: New construction. (Image: Pexels.com)

At this year’s Residential Construction Day, representatives from construction associations, trade unions and politics met in order to discuss causes and solutions for the housing shortage. The central realisation: There are numerous negative factors that explain the insufficient amount of new constructions.

The lack of inexpensive construction land in particular poses a bottleneck in tense markets. According to the Prognos study “Who constructs Germany?”, which has been showcased in the wake of the Residential Construction Day, there should be even more hurdles. While some expensive land costs are being settled through higher rent costs, long approval processes and complicated building regulations should impede the development of innovative construction concepts, like the conversion or increase of existing buildings.

Furthermore, the construction industry’s capacities have growth potential at their disposal, according to the representatives – even if the construction activity itself recorded strong growth between the years 2011 and 2017. The amount of completions in multi-storey construction hereby even doubled, while average floor space of new apartments decreased by around ten percent. The reason for this compression of living space should be the higher increase of apartments (+52 percent) in comparison to the living area (+37 percent). Long-term growth of building capacities and therefore additional investment securities could now be encouraged if political promotion measures would be set on a longer time span. Especially significant for housing markets should hereby be strategic programs for the medium to long term horizon, say the scientists of the Prognos AG.

The Prognos AG, based in Switzerland, is considered one of the oldest companies in the sector of economic research for the European area. Among the contracting authorities are private companies as well as foundations, public funding agencies and associations. On behalf of the association’s confederation Wohnungsbau (German for residential construction), which consists of seven organisations and associations of the construction and real estate industry, Prognos prepared the study provided here. The goal of the confederation is to promote new constructions in Germany. The Residential Construction Day, which has now been taking place for eleven years, hereby tries to introduce this subject matter into the public discourse.

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