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The sharp rise in construction costs and construction prices are one reason for the setback in the real estate industry in recent months. What’s next?
There are currently two different signals from Statistics Austria. It is important to know how the key figures are defined: The construction cost index monitors the development of the costs incurred by contractors when carrying out construction work due to changes in the cost basis (material and labour). The construction price index records the price level of construction projects and thus provides information about the development of the actual prices that the client pays for the construction work.
At 123.1 points, the construction cost index for residential and residential buildings in July was 0.2 percent below the previous year’s value and 0.9 percent below June. Thus, the construction cost index fell for the fourth time this year, as reported by Statistics Austria. Construction costs have also fallen in bridge construction. They are down 3.1 percent year-on-year and 0.6 percent month-on-month. The reason for this is the ongoing price decline for steel products, according to the statistics authority. In other areas, however, costs have risen. For road construction, the index has a value of 131.2 points, which is 0.4 percent higher than the value of July 2022. Sanitary engineering has become more expensive by 2.1 percent since the previous year.
In the second quarter, the already high construction prices rose by an average of 5.9 percent compared to the same period of the previous year, as Statistics Austria announced. The rise in building construction was particularly strong with an increase of 8.8 percent. The prices in the two building sectors residential and settlement construction as well as other building construction increased by 8.7 and 8.8 percent respectively. The price development in civil engineering was much more moderate – with an increase of 1.2 percent compared to the same period of the previous year or 0.3 percent compared to the previous quarter. Road construction, for example, cost 1.5 percent more year-on-year, bridge construction 1.4 percent more and other civil engineering 0.8 percent more. Accordingly, the rise in prices for building services such as plastering, coatings on wood, metal, masonry, plaster, concrete, lightweight panels, electrical installations and gas and water installations made a particular contribution to the price increases in building construction.
Source: Nachrichten
