Builders and customers are feeling the effects of rising prices - an expert reveals reasons for expensive construction

Created: 12/28/2021, 2:55 PM

From: Ines Baur

Craftsmen and craft businesses are increasingly troubled by the pandemic.

Consumers are also feeling the effects of rising prices and long waiting times.

© picture alliance / Nicolas Armer / dpa 

The ongoing corona situation has noticeable consequences for supply chains, crafts and material prices.

Why builders and consumers have to reckon with rising prices and longer waiting times for their projects - also for the future.

Berlin - "This price development for materials that has existed in the past few months has never been seen before in well over 40 years of self-employment," says Hans Peter Wollseifer, President of the

.

“Building will become more expensive in the future, not just because wages are rising, but because the prices for materials are rising.” Wollseifer fears that prices - even if the material shortages are eased - will not completely fall back to the pre-crisis level.

"Private customers wait longer for craftsmen and pay significantly more"

Anyone who has hesitated over the past few years to start building or renovating their own home is likely to be very annoyed with themselves. Because home builders and homeowners will need more patience and more budget in the future to realize their projects. The ever increasing prices for material have more and more consequences for customers. "Private customers wait longer for craftsmen and pay significantly more," continues Wollseifer. In the construction industry, customers waited an average of 14 weeks and in the finishing industry eleven weeks.

The reasons for the growing material prices - as is the case with wood, metals and insulation materials, for example - are to be found in the rise in the price of raw materials due to the sharp rise in demand from China and the USA. Production problems for various goods continue to cause problems, the interruption of the supply chain does the rest.

Some handicraft businesses are already stumbling and are hoping that customers will be accommodating.

"In the private sector you can always talk to the client and we meet with understanding," says the President of the Central Association of German Crafts.

In the municipal sector, in the public sector, this is less the case.

There would be relatively little accommodation.

“Very few have a price escalation clause, and current contracts that can only be fulfilled uneconomically are not adjusted.

Many companies are now making lousy things because of this. "

Construction rates and inflation don't make life easier for consumers

Not only material costs have risen and are on the pockets of consumers and businesses.

Construction financing has also become noticeably more expensive in the course of the year, writes the finance

.

The reason is the rising yields on ten-year Bunds, which have risen significantly again since mid-August.

For ten-year building loans, an average effective interest rate of 0.94 percent per year is currently due.

At the beginning of February it was still 0.67 percent.

"Googles and Amazons of this world do not show their solidarity as we would need it"

According to the

, the craftsman

calling for tax relief for companies. Corporations would be taxed less at the corporate level than partnerships on undistributed profits. Here must be adjusted. Since these problems have long been known, it is necessary to act.

“I don't want to do any industry bashing, but the Googles of this world, the Amazons of this world, they have not shown as much solidarity as we actually need, and how it would be justified if you look at how they use the infrastructure Germany and the good specialists make use of it, ”said Wollseifer.

“It is therefore right that the new government also wants to further advance global minimum taxation.

And that she wants to support efforts to reorganize international taxation laws. "