IFO index: Housing construction creates hope again

The mood in German housing improves. The business climate index for the industry, which was raised by the Munich IFO Institute, has increased by almost 6 points to the highest value since September 2022. However, it is still deep in the minus with minus 25.2.

Above all, the business expectations are better assessed and approach the values again before the crash after the start of the Ukraine war. But the current situation is also more positive. But it is still very far from old values.

“The companies in residential construction continue to cautiously hope,” says Klaus Wohlrabe, head of the IFO surveys. “The mood increases – but the way back to normal is still long.” This can be seen, among other things, in the order situation. Even if the proportion decreased, 47.9 percent of the companies surveyed still report on the lack of order.

“The direction is right, but housing construction needs more than announcements,” said Wohlrabe. “Only if the housing construction turbo really ignites can the recovery stabilize,” says the expert with a view to plans by the Federal Government to postpone the construction. According to the IFO, there is also room for the financing costs for living space.