Construction prices are rising faster than they have in three years – what this means for you

TVS News AI, editorially supervised, presents Construction prices are rising faster than they have in three years – what this means for you.

If you're even thinking about building a house or renovating a roof, this number is first and foremost a dampener: prices for new construction of conventionally built residential buildings were 5.5 percent higher in August than a year earlier. Germany's Federal Statistical Office reported this on Friday in its quarterly assessment. The last larger increase was in summer 2023 – back then, it was 6.3 percent. As recently as May, the rise had been just 5.0 percent, meaning construction prices climbed another 1.0 percent from May to August. All price figures refer to work performed on the building including value-added tax.

Building is therefore becoming not just more expensive, but more expensive than almost everything else: general inflation (consumer prices) stood at 2.9 percent over the same period. Construction prices are therefore rising almost twice as fast as general inflation. You feel this directly the moment you request a quote from a tradesperson or a construction company – and not just for one trade, but across the board.

Roofers hit hardest

Looking at individual trades, the picture is sharply uneven. Roofing work rose 7.6 percent year-on-year – by some distance the highest figure among the items reported. It is followed by carpentry and timber construction at +7.2 percent and earthworks at +6.1 percent. Shell construction work overall ran 5.4 percent above the previous year's level, with concrete work (+4.3 percent) and masonry work (+4.2 percent) the largest individual line items in residential construction. Interior finishing work rose on average by 5.7 percent, with the Federal Statistical Office singling out heating systems and central water-heating systems as price drivers in this area.

What this means for you in concrete terms: roofing work can hardly be postponed or replaced by your own labor. If storms or aging have taken their toll on the material, you have to act – no matter what the bill looks like in the end.

Less new construction, rising interest rates – and nobody builds

Prices, however, are only half the story. In Germany, significantly fewer apartments are being built than is needed, particularly in major cities – steadily rising construction costs in recent years are identified in the report as one of the main obstacles. On top of that come higher mortgage rates, which are causing restraint among private home builders as well as large investors. Less building coupled with growing demand – in the end, that bill is paid by everyone looking for an apartment or paying rent.

Not just in the housing market

The price increase has long since stopped affecting only private builders. Office buildings also became 5.7 percent more expensive in August year-on-year, commercial operating buildings 5.5 percent. In road construction, prices climbed by as much as 6.9 percent – a figure that, via public contracts, ultimately reaches you too as a taxpayer.

More data, more depth

You can find the exact figures and background in the original report at Manager Magazin.