Construction costs are currently skyrocketing

Now *I’m* laughing :-D
Here, 30 pages in a row are rambling about the influence of climate change. But rising interest rates, which can easily amount to 20k in total costs, are being laughed at ;-)

Glad you’re having fun! :-)

But I think we actually agreed that the climate currently has hardly any impact on construction costs.
The discussion came up because false statements about climate change, technologies, etc., are repeatedly posted, which then need to be corrected.

Alright, let’s say 0.2 and maybe 8 weeks. But the current trend is clear

So, even more: who cares?
Statements about construction costs rising by around 10% keep popping up here—so what are 0.2 percentage points in interest? ;-)

Small interest rate increases quickly go into the thousands or even tens of thousands. Especially when you consider the amounts being financed nowadays.

That would already itch me ¯\_(ツ)_/¯

But you are right. Neither the climate issue nor the interest rates have had any influence on what has happened in the last 2 years.

There is simply very high demand meeting hardly any supply. On top of that, skilled labor shortages, material shortages, free-rider effects, etc. come together.

By the way, I think it's pretty good that it is now more worthwhile again for young people to do an apprenticeship in the construction-related craft. Every hardworking bricklayer journeyman is chuckling right now when he works on his own little house on Saturday with 3-4 coworkers or industry-related acquaintances, while 15 years ago he was still being indoctrinated that only academics can earn money.

So, even more: who cares?
There are always statements about construction costs rising by around 10%, so what are 0.2 percentage points of interest? ;-)

Another small factor that excludes more people from buying/building again and reduces demand? It doesn’t have to stay at 0.2% – it’s just getting started – or does anyone believe that everything will soon be "normal" again?

When I was a young man, there was indeed 9% interest, but plenty of building land. Today 1% interest but hardly any land left. What does that do to the price? By the way, designating building land is becoming increasingly difficult because legal requirements against urban sprawl, land consumption, etc. hardly allow any bypassing into the outskirts of towns anymore. Prices rise. The construction itself, here low interest rates, limited company capacities meet the demand for large and beautiful and the laws of the energy saving ordinance. Prices take off. In 1967, D. was still expanding, construction was booming too, but relatively high interest and the principle of quick and dirty kept the price in check. And now we are coming into a real scarcity of people and material, the price explodes. Because not only private individuals but also public clients are building and building, apartments, single-family houses, commercial buildings, it is unmanageable. All this really has nothing to do with decarbonization and the like yet, but in the future that will not have a price-lowering effect either. Alleviating would be smaller buildings, simpler, standardized, fewer, plus more building land, none of this is in sight.

I don't think more building land makes direct sense right now. In two or three years, the baby boomer generation will start to involuntarily free up living space. And once the base of the pyramid is gone, villages will die off one after another. What will the inheriting generation do with the house if it was just built ten years earlier?

Land shortage is only a symptom, as wrote. No change is needed there. The causes lie elsewhere.

Within the last four to six weeks, interest rates have risen on average by 0.3 percentage points.

That's quite a lot

No, it’s not. If that’s “quite a lot,” it’s only because people are living on the edge. Combined with the (excessively) high project costs and poor loan-to-value ratios. You also have to realize that you don’t have to carry out projects at defensive prices. But for some, their fuse blows when they hear that it’s (currently) not a good idea to build a property. Patience simply is no longer a virtue. Everything and immediately. We recently had a thread with a totally crazy calculation, but the builder wants to push it through. Even the bank is already waving them off, but they just don’t get it.

“Back then,” interest rates on loans were 4, 5, 8%. That was normal for a very long time. It was normal for project costs to be identical to the interest payments until the project was paid off. Maybe it’s clearer now why some are laughing? Today you borrow €500,000 and pay off the thing in 30 years with €120,000 in interest. Ridiculous!