Is wood the new gold?
While there was a slump in demand for wood at the beginning of the coronavirus pandemic, the industry is now struggling to keep up with production. The situation is similar for other building materials such as metal and plastics. Whether it's insulation, sheet metal, paints, plastic pipes, or insulating materials for cables, many manufacturers are affected by the shortage.
Where does the raw material shortage come from?
In addition to the impact of the coronavirus pandemic on the production of building materials, the buying up of raw materials by China and the US is also causing bottlenecks and significantly higher prices. On top of that, DIY is booming. Many people who had saved money for vacations invested it in patios, garden sheds, or carports during the pandemic. The reduction in value-added tax also drove this development. According to the Berliner Zeitung, prefabricated timber construction rose by 20 percent in November and December 2020 compared to the same period last year.
While a roof batten cost €0.50 per meter before Corona, for example, the price in spring 2021 is €1.30 – if you can get one at all. Unfortunately, gravel and sand are also not available in abundance. These are developments that began before the pandemic, but have now intensified. Craftsmen and building contractors are having problems fulfilling orders that have already been placed.
When will the situation ease?
Construction experts hope that the situation will stabilize over the course of the year – at least as far as material shortages are concerned. However, they do not expect prices to fall in the short term. Under certain circumstances, prices may even remain at the same level once the bottleneck has been overcome. Many even see the current situation as a brake on economic development in Germany after the coronavirus pandemic.
What can private builders do?
It is advisable for builders to be flexible at present. One measure could be to reschedule individual construction activities, if possible. In other words, only renovate or build what is currently possible. In addition, construction experts advise placing orders as early as possible. The earlier an order is received, the more time tradespeople have to procure the necessary building materials. This means that longer delivery times have less of an impact on construction progress.
Would you like to know whether renovation is currently worthwhile before selling your property? Contact us! We will be happy to advise you.
Further information can be found here:
- capital.de: What the current raw material shortage means for the market
- abendzeitung-muenchen.de: Tradespeople call for export brakes
- https://www.kreiszeitung.de: Raw material shortage according to CDU expert talk on sought-after raw materials
Legal notice: This article does not constitute tax or legal advice in individual cases. Please consult a lawyer and/or tax advisor to clarify the facts of your specific case.
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