Why don't construction prices go down?

Why? The bank has the securities in the land register.

Believe it or not, houses can also lose value dramatically. Just imagine VW closing the plant in Baunatal or drastically downsizing it because there is no longer a need for highly complex 7+ speed automatic transmissions. Then prices in the region quickly plummet to rock bottom.

Believe it or not, houses can also lose value dramatically.
Just imagine if the VW plant in Baunatal closes or drastically downsizes because there is no longer demand for highly complex 7+ speed automatic transmissions. Then prices in the region quickly plummet to rock bottom.

But if you don't want to change your financing or sell, it doesn't matter at all. In the worst case, you just inherit a worthless property, but you have always lived wall to wall without annoying neighbors. Without selling, nothing happens at first.

An expert stated in a market update that in the recent past larger price differences (~100,000 EUR) at the same quality level have been observed in offer comparisons. It is speculated that the order situation at some prefabricated house manufacturers is no longer quite as good and some providers are adjusting the price to secure more orders.

Yes. But do you want to buy/build from a provider who offers ruinous prices, i.e., around +/- 0 or below cost? For a mass product, which I receive and then pay for, okay. But for a house, where I might still report significant defects and depend on them?

We experienced this during the pandemic when everything came to a halt and our competitors, out of desperation, started offering prices below cost. That's when we got out of the downward spiral at the latest. Two of them are now insolvent or have been bought out and "restructured."

Therefore, the downward spiral in prices, which seems to be slowly reversing now, does not necessarily have to be good for the customer. Many will be left behind and leave unfinished houses.

PS: I did build with Town & Country, but I never had the impression that they were on the verge of bankruptcy, although they are really affordable. If they suddenly cut prices by 20% for the same house now, where is the saving supposed to come from? That can only affect the substance.

The possibility of ruinous prices is indeed referred to in the video, and it is recommended to secure oneself contractually if one feels that it is so cheap that it might be too good to be true. It is currently not known that a provider is in financial trouble.

Furthermore, no names of providers were mentioned, meaning it is not necessarily the case that the cheap providers are the ones lowering prices.

In my opinion, it could just as well be that there is pressure on the margins. I hardly believe that it was broadly missed during the boom years to raise them so high that there is now no room to go lower.

Yep, I also don’t see it that price reductions are only possible through ruinous dumping prices.

In the context of the supply shock, many prices skyrocketed. The price wave rolled through the entire supply chain. Price thresholds, once crossed, are only reluctantly and slowly abandoned (as you know from the gas station). As long as the competition doesn’t force you to, you can stay a bit higher on price and take a better margin (but sooner or later people will fill up where it’s cheapest). Now the wave is moving in the other direction, but when it goes through several stages in the supply chain (and because the construction business as a market is quite sluggish anyway), it takes its time. Even if the general contractor wants to become cheaper, he can only give up a bit of his margin, but if the parquet supplier thinks he can still sell his goods extremely expensively, then the general contractor has to buy cheaper parquet elsewhere... and eventually the parquet manufacturer has to look for cheaper wood (keyword: wood prices collapse).

But it all takes a bit of time and inflation of course works against it.