Federal Minister Hubertz Aims to Significantly Reduce Construction Costs for Housing

The Federal Minister of Building, Verena Hubertz, has announced ambitious plans to drastically lower the costs associated with constructing new residential buildings. In a recent interview, she stated that it is feasible to cut expenses by as much as 30 to 40 percent. This reduction is expected to be achieved through the increased use of serial prefabricated components, such as pre-manufactured building walls.

Hubertz emphasized that leveraging these methods could lead to substantial savings, potentially reducing the average construction cost from EUR5,000 per square meter to between EUR2,500 and EUR3,000. She expressed confidence that there might even be further opportunities for cost reductions when considering financing costs as part of the overall budget.

Additionally, the Minister highlighted the need to address rising land costs, which are a significant factor in overall construction expenses. Hubertz is looking into options such as long-term lease agreements, known as ground leases, as a way to mitigate these costs. She pointed out that tackling this issue requires a comprehensive approach, analyzing the entire life cycle of a building and its associated cost drivers.

When discussing the government's housing construction goals, Hubertz refrained from committing to the previously stated target of building 400,000 new homes annually. She noted that this figure was not included in the coalition agreement, which is a prudent decision given the rapidly changing circumstances in the housing market.

Hubertz also criticized the construction output from the previous year, describing the completion of approximately 250,000 homes as a significant failure. She expressed optimism about the recent uptick in building permits, indicating a potential positive shift in the housing construction landscape.