Analysis: Construction of new housing in Europe will decrease due to high costs

Germany/ photo: Pixabay

The construction of new housing in Europe will weaken sharply in the coming years due to rising costs, the German institute Ifo reported, referring to the projections of the network of European institutes Euroconstruct.

Europe will only get about 1,5 million new housing units by 2026, 13 percent less than in 2023, the Ifo economic research institute, a member of the network, said.

The assessment covers Germany, France, Sweden, Denmark, Austria, Belgium, Czech Republic, Finland, Hungary, Italy, Netherlands, Norway, Poland, Portugal, Spain, Switzerland, Slovakia, Great Britain and Ireland.

The number of newly built apartments will decrease the most in Sweden until 2026, by as much as 47 percent compared to 2023, according to Euroconstruct research. Germany is next, with a predicted drop in the number of new apartments by 35 percent, the Munich Institute points out.

In France, it should decrease by 22 percent, and in Denmark by 19 percent. The bright spots are Ireland, Slovakia and the United Kingdom, with 16, 14 and 12 percent more new homes forecast than in 2023.

Investments in new residential buildings in Europe should decrease by 6,4 percent in the observed period, and the costs of maintaining and renovating apartments by 1,2 percent, the research showed.

Activity in the European construction sector will increase by 7,5 percent by 2026 thanks to expected above-average momentum in the energy and rail sectors and in the water sector, Euroconstruct estimates.

"The driving forces of growth include political goals in energy and environmental protection, capacity adjustment in transport infrastructure and the general need to modernize networks," explains Ludwig Dorfmeister, an expert from the German Institute of Construction.

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