German housing cancellations hit record as crisis deepens

GERMANY’S home-building crisis is intensifying as builders say they’re suffering from record cancellations and a lack of orders. 

In October, 22.2 per cent of residential construction companies said they were affected by project cancellations, according to a survey by the Munich-based Ifo institute. That’s the highest level since records began in 1991, surpassing the previous high of 21.4 per cent in September. Business expectations in the sector have also plunged to the lowest level on record. 

“The outlook for residential construction remains gloomy,” Klaus Wohlrabe, head of surveys at Ifo, said in a statement. “Companies are preparing for hard times.”  

Incoming orders have cooled noticeably as high interest rates and rising material costs intensify uncertainty among developers. In October, 48.7 per cent of building companies reported a lack or orders, up from 46.6 per cent in September. 

With no recovery in sight, the situation is becoming a threat for some construction firms, with one in ten companies already reporting financial difficulties, Wohlrabe said. BLOOMBERG