Real Estate and Society

Demand for building material like timber rising rapidly – as are the prices

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26.

August 2021

Materials like timber, steel and insulation are quite obviously indispensable in building construction. But since the outbreak of the coronavirus pandemic, demand has skyrocketed, and supplies are running low. According to figures released by the Federal Statistical Office (Destatis), prices have in some cases gone up by more than 80 percent since 2020.

Nothing doing without timber, steel and insulation material

Timber is used for all sorts of things in construction. In the words of the Federal Statistical Office: Timber made up a share of 23 percent of the building materials in detached and semi-detached homes, and 88 percent in prefab housing. Yet since May 2020, the price of construction-grade timber has increased by 83 percent. Builders are paying an extra 45.7 percent for roof battens, while the price for structural timber rose by 38.4 percent. It was strong demand that caused supplies of this building material to contract and prices to soar. Builders are having an increasingly hard time to meet their completion deadlines.

Another building material shortage affects steel. Reinforcing steel processed into re-bars sells for 44.3 percent more than it did the previous year. For reinforcing steel mesh, the price hike was a bit more modest at 30.4 percent. This building material is used primarily to reinforce floor plates, ceilings or walls.

Statisticians blame the upward price growth on supply bottlenecks caused by the COVID-19 pandemic. The effect is also reflected in rising oil prices. Within a year’s time, the price of bitumen, a tar-like compound distilled from petroleum and used to seal roofs, buildings and foundations, surged by 64 percent.

Local production would provide relief

Gravel and sand take exception from the building material shortage. An ample supply of these materials, which are used mainly in the production of cement and concrete, is available in northern Germany. Accordingly, their price increased by a moderate 4.8 percent only. The price of fresh concrete remained almost stable at 1.7 percent, whereas building bricks and roof tiles registered a price growth of 2.2 percent. Then again, there are massive issues in the mining of sand and gravel in Germany, according to Andreas Breitner, Director of the VNW Association of Northern German Housing Companies. On the one hand, permit procedures are hampered by red tape. On the other hand, there is local resistance to the zoning of new gravel pits. These factors increase the dependence on imports, or so Breitner argued.

Felix Pakleppa, the Director General of the ZDB German Construction Confederation, therefore demanded that domestic mining of gravel, sand and gypsum should be stepped up: “It makes no sense to rely on imported building materials when large quantities of mineral building materials are readily available at home.”(Source: www.zdb.de)

At the same time, the state-level ministers of economic affairs of Thuringia and Saarland, Wolfgang Tiefensee and Anke Rehlinger (both Social Democrats), demanded that the export of raw timber be reined in. They reported that Germany exported a record volume of 12.7 million cubic metres of timber last year.

Sources: www.vnw.de www.haufe.de www.zdb.de

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