Rising construction costs – how do we deal with it?

Supply chain delays became an issue during the Covid pandemic when the whole world was quarantined and production shut down. The shortage of building materials was exacerbated by the war in the Ukraine, resulting in spiking construction costs which strongly impact construction activity. Many developers as well as large corporations, such as Vonovia, Germany’s biggest residential real estate manager, announced that they will not start any new construction projects in 2023. On our construction sites we have our own experiences with cost increases, delivery delaysand shortage of craftsmen. However, until mid-2022 rising construction costs entailed rising sales prices. Nevertheless, our position on condominium remains positive  as it will remain a scarce good in the metropolitan areas, especially considering that there will be little new construction due to high construction costs, as well as fewer and fewer investment opportunities due to current legislation.