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Upturn Over – Interest Rates Weigh Heavily on Housing Construction

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  • Just Tobias

Abstract

In 2021, 293,000 dwellings were completed in Germany. This is at least 130,000 more than were completed at the low point in 2010, but less than the government had planned in order to limit the housing shortage. It is very likely, that residential construction is going to decline following the strong increase in interest rates and already falling residential prices. This decline in residential construction can only be expected in the short term; in the medium term there are good reasons to believe that Germany has not finished building. It is therefore important to ensure that the elasticity of construction supply is not reduced during this adjustment phase.

Suggested Citation

  • Just Tobias, 2023. "Upturn Over – Interest Rates Weigh Heavily on Housing Construction," Wirtschaftsdienst, Sciendo, vol. 103(1), pages 20-23, January.
    • Handle: RePEc:vrs:wirtsc:v:103:y:2023:i:1:p:20-23:n:10
    DOI: 10.2478/wd-2023-0010
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    More about this item

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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