Number of the month: 16.4%

The crises of 2022 also impacted the construction sector. Rising energy costs, in particular, drove up material prices. This, in turn, caused construction costs to skyrocket. As a result, the average annual price for new residential buildings increased by 16.4% compared to 2021.

According to a press release from the Federal Statistical Office, this is the highest year-on-year change recorded since the survey began in 1958. Higher energy prices led to increased costs, particularly for building materials that are energy-intensive to produce. These include steel, glass, bitumen, and plastics.

For example, the price of flat glass, primarily used for windows and glass doors, increased by a substantial 49.3%. Metal prices rose by 26.5%. As a result, the associated labor costs also increased: metal construction work was 20.7% higher, glazing work 21.2% more expensive, insulation and fire protection work on technical systems 27.2% more expensive, and steel construction work 19.8% more expensive than the previous year. Interestingly, however, prices for structural timber fell by 11.9%.

Fewer building permits as a consequence

Federal Statistical Office, significant price increases in building materials and labor led to fewer new building permits being issued. The number of building permits for residential and non-residential buildings fell by 5.7% to approximately 322,000. In the residential sector, permits were issued for 276,000 apartments, 5.8% fewer than the previous year. The number of single-family homes built decreased by 15.9%.

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Notes

For the sake of readability, this text uses the generic masculine form. Female and other gender identities are explicitly included where relevant to the statement.

This article does not constitute tax or legal advice for any specific case. Please consult a lawyer and/or tax advisor to clarify the facts of your individual situation.

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