What are the causes of shortages

Real Estate PodcastWhat the current scarcity of raw materials means for the construction industry

Building materials are becoming scarce in Germany. Right at the forefront: wood. This leads to bottlenecks and delays in the construction industry and in craft businesses. Due to the high demand, prices also multiply. In the sixth episode of the new Capital real estate podcast “Management Report”, Peter Hettenbach and Katarina Ivankovic, managing directors of the iib Institute, talk about the causes of the shortage of wood and what consequences the situation has for a prefabricated house contract, for example.

“The subject of wood reads like a thriller,” says Ivankovic. "A few factors have come together that created the big problem." After a brief drop in demand due to the corona epidemic, the industry is now unable to keep up with production, partly due to the shortage of workers. Then there is the “nature factor”, says Ivankovic. The conditions for logging were not ideal.

But not only the wood is running out: “We don't have any metal either. We don't have any plastic products that are based on petroleum, ”says Hettenbach. There are also problems with mineral building materials such as gravel and sand. Unpredictable delivery times and enormous price increases are the consequence.

Plan for the longer term

For customers, this means that the cost of building materials would have tripled in some cases compared to the beginning of the year - even in the hardware store. Will the situation relax, will prices fall again? “I think there will be inflationary effects in the medium and long term,” predicts Ivankovic. "There will be price increases and the industry will try to ensure that it stays that way." At least one will not return to the situation before the pandemic. “It is definitely an occasion to plan for the longer term,” adds Hettenbach. The experts advise not to start projects now if they are not urgent.

The demand for building materials is also high abroad: In China in particular, the demand for wood is increasing every year, said Ivankovic. That drove up prices, also in Europe. Hettenbach says: "I have just spoken to an industry professional who said it was being shipped directly from the Black Forest to China." For the longest time, China had also been a steel exporter, now the country itself is an importer of the building material. In the "Management Report" you can hear what the building material shortage looks like in Canada and the USA.

Also hear in the sixth episode of the "Management Report":

  • Where the delivery bottlenecks for insulation materials come from
  • How the transport costs have changed
  • How you can specifically create planning security when building a house

You can find all episodes directly at Audio Now, Apple or Spotify or via Google.