These figures were presented as part of forecasts made by the Euroconstruct research group, of which the ifo Institute is a member. “Especially the sharp rise in construction and financing costs makes the construction of new housing units in Germany no longer possible in many cases. The government has not yet taken the necessary steps to significantly improve the framework conditions,” ifo construction expert Ludwig Dorffmeister comments.
In most of the 19 countries analyzed by Euroconstruct, the situation in the housing construction sector is becoming increasingly negative. Ahead of Germany, Sweden will see the biggest decrease in the number of completions by 2026 (-47%) compared to 2023. France (-22%) and Denmark (-19%) follow third and fourth place, respectively. “The construction experts highlight in particular the increased cost of borrowing and the shrinking financial flexibility of private households,” Dorffmeister says. As a result of these circumstances, the need for additional housing space, which is in fact considerable in many countries and regions, becomes less of a priority. Nevertheless, there are positive signals in some countries, that is Ireland (+16%), Slovakia (+14%) and Great Britain (+12%).
In 2026, total investments in new residential buildings in Europe are expected to be 6.4% lower than they were in 2023. Spending on maintenance and renovations of housing units will only fall by 1.2% by 2026.
