Why don't construction prices go down?

Hello everyone,

I obtained quotes for windows in the middle of last year.
Now I have had these quotes renewed and the prices are significantly higher.

I wonder how that can be?!

The fact is: much less is being built and many fewer houses are being sold.
Furthermore, interest rates are much higher and people are spending less.

That means demand is much lower than a year ago.

In addition, energy prices are much lower than a year ago. A year ago they were at their highest, right after the war.
That means production costs should also be lower.

Ergo: less demand, lower demand and at the same time lower production costs.

But still much higher prices?! How can that be?
The same price would be okay, but not +30-40%!

What could be the reason?
I suspect the craftsmen are trying to make quick full cash now, the order books are still well filled because there are still old orders in there. It’s always time-delayed.
I think in autumn it will be much emptier and prices will go down.
What do you think?

Prices are rising not despite the crisis, but because of the crisis, regardless of the actual supply-demand situation. If the window installer knows that everyone is raising prices and the customer expects prices to rise because that is being said everywhere, ... then he raises the prices. He still gets the contract because the customer does not question it or expects the increase, and everyone else is more expensive anyway.

The price increase you received probably did not happen from January to May 2023, but already took place last summer. Now the surge has temporarily stopped according to statistics and energy prices are currently lower again. However, no one will lower prices unless they have to – and that brings us to your question. The pressure is (still) not there. Maybe they will go down again, but my recommendation would be to obtain comparison offers. Especially with windows, you can order windows from almost all manufacturers online. Simply assemble the models offered to you in a configurator and then you will know if there is still room for negotiation.

At least with heat pumps, this is currently the case. The heating engineer is asking for 20k for the material. Three seconds with a search engine and you know it is only half that. But when it comes to heating, there is rarely a choice at the moment because all the others (see above) are just as expensive.

Many home builders still have a backlog of orders ahead of them. None of them are lowering prices. The demand for almost all trades will continue to remain high due to renovations. Of course, it is more fragmented than new construction, but every little bit helps. 100-150k for an energy retrofit is also easier to finance than 500k+ for a new build.

However, it is also the case that many companies do not buy their energy on the spot market but fix it for several months. And we still have gas prices in the private customer sector of 20 cents/kWh at many municipal utilities.

It will hardly be different for medium-sized companies that do not have an investment banker speculating or buying on the spot market.

Moreover, many medium-sized companies first have to recover what they lost in autumn 2022, when prices temporarily rose to 20 times as much. Those whose contracts expired right then had real problems...

We had a period in autumn 2022 when our suppliers guaranteed us the price for 24 hours, sometimes only for 8 hours, because the aluminum price made daily leaps. Copper in switchgear construction has been billed by most manufacturers based on the daily price for many years as a variable component...

Not everything can always be explained by greed. Oh, and wages for IG Metall companies will rise by 5.2% from 1.6. In addition to the 3,000 EUR, which is tax-free as compensation for inflation. That is also coming on top.

It is not always possible to explain everything with greed.

What happens in the trades market, though, IMHO. A heat pump alone easily costs half the price on the market and the craftsman wants double for it, just so he can buy the pump. That’s already cheeky. I also took the windows now, compared what was offered there with an online offer.. Just 30-40% more expensive! Exactly the same window, everything 100% identical. And that with ALL offers and I got 5 from the most diverse companies. That is 100000% greed and nothing else.

Supply and demand. If demand is greater than supply, prices go up. Then there is also the high inflation.

Why should prices fall?