Why don't construction prices go down?

Well, then I'll ask a question.

In China, the VW ID 3 costs about 15,600 euros. At any other price, the vehicle would not be sold there.

In Germany, the same car, the VW ID 3 with the same equipment as in China, costs 58,500 euros at the local VW dealer.

Now, will the VW be more expensive in China or cheaper in Germany?

By the way, I bought my bathroom fittings, sinks, etc. in Croatia. There was a mega dealer in Split with a selection you can't find anywhere here. I then decided on Grohe, which only cost a third of the German price there. For whatever reason.

A built-in sink, the same one was hanging in Globus for 164 euros, I took it for 32 euros there. But I was on vacation there anyway. So I didn't go there just for that. But even on the south side of Lake Garda, you can find plenty of tiles and sanitary dealers. They usually also sell to private customers.

Good. So you have saved a lot of money for your project - I honestly am happy for you! However, this changes exactly ZERO about the overall cost situation. And it also does not mean that prices will now massively drop across the board - not even below the level from a few months ago, much less anywhere near the pre-crisis level.

Both with cars and with goods, it has always been like this - and strangely, you can only profit from it to a limited extent! If I want an ID3 here in Germany, what use is it to me that it is sold in China for 15k, 51k, or 150k? None. What use is it to me if the tile dealer in Split has great tiles very cheaply, when I need Polokal sewer pipes here?

Again. For the very special project of an already locally present and apparently sufficiently knowledgeable and highly flexible purchaser, bargains can certainly be made. They have always existed and always will. That has very little to do with the total price of building a house.

Every person follows the path of least resistance. It's like electricity. Clearly.

Nowadays, hardly anyone wants to make sacrifices or endure hardship; buying a house is very much like buying a car today. I pick something nice from the catalog, visit a model home, and off we go once the financing is secured. Of course, turnkey with a fence and driveway. Money doesn’t matter; money costs almost nothing.

At least a city villa and preferably a pool in the garden. When construction begins, best to take a big vacation, and when moving in, lease a new car. What a generation ago might have been reserved for a doctor or company executive is now done by every middle-level employee or three-shift worker in an automotive company.

If you’ve built like that, why not. If the interest rates are fixed for 30 years and you make proper repayments, then you can do it. If not, it gets difficult.

According to assessments, there will be no change to the list prices, but more discounts will be possible again. It would be a fatal signal if something became cheaper, as then waiting would be worthwhile and we would enter a deflationary spiral. FOMO is one of the best arguments in prefabricated house sales ("Secure the old prices now!"). Why not just lower the price then? No idea, probably not necessary, because people spend 5 minutes in front of the supermarket shelf looking for the cheapest product per kilogram, but when building a house, the price is not compared and thus no one has to make anything cheaper.

If equity is available and risk-exposed, waiting is still worthwhile because currently the stock markets are only growing moderately, while construction prices are stagnating. As soon as the situation with inflation/interest rates eases, the future will be traded on the stock markets and prices will rise, while in the slower construction market it will take longer until there are enough orders to realize substantial price increases again.

Reading newspaper articles on price increases in construction, a house consists alternately of at least two-thirds labor and one-third material (when labor costs rise) or two-thirds material and one-third labor (in case of supply bottlenecks).

Despite this year’s construction cost increases, there was a real decline in sales due to the order situation. Nominally, however, sales still increased well. If the laws of the market do not apply to construction and a doubled price for roof battens will never be halved again, why is no one more ambitious and simply doubles all prices every two years? One would have to work less with rising sales...

Sorry, that was somewhat exaggerated at times, and I do see the arguments of the price-can-only-go-up faction very well, but I find it hard to accept certain inconsistencies in the consequences of this statement. I also come from the I-want-to-build faction with wishful thinking that prices can fall.

Well then, I'll ask a question.

In China, the VW ID 3 costs about 15,600 euros. At any other price, the vehicle wouldn't be sellable there.

In Germany, the same car, the VW ID 3 with the same equipment as in China, costs 58,500 euros at the local VW dealer.

So, will the VW be more expensive in China or cheaper in Germany?

Well then, please do proper research and avoid barroom statements:

The approx. €15,600 was a limited promotion for 7,000 cars in July; currently, the ID3 in China costs about €21,000 compared to €40,000 (before subsidies) in Germany.
Why is it cheaper in China? It is manufactured almost 100% from local products/raw materials with Chinese electricity prices and Chinese dumping wages. Additionally, but not decisively, there is price competition in China. VW also earns somewhat less in China than in Germany.

Therefore, there will be no massive changes there or here – and this can be applied to many products – yes, prices overall will come down, but from a Mt. Everest level. It will remain expensive.

P.S. By the way, you cannot import the Chinese ID3. It is not homologated for the EU, so it is not roadworthy in Germany without proper conversion and individual approval effort. It simply isn't the same product after all.
This also applies to many construction products that are sold almost identically abroad. But only almost (that might not be a big deal, but with a fitting you don't know what the interior actually looks like and whether Grohe Germany = Grohe Croatia. It might be, but it might not).

Regarding cars, I can only agree with Karsten. I was involved in the automotive industry for a long time, and the statement "the same car costs half as much abroad!" has strangely never led to anyone importing these cars that cost half as much abroad by the dozens into DE. Guess why. There are some providers of EU re-imports here, but how big or small is their market share? Always just saying "because people don't recognize the truth" falls short. It starts with the oil cooler that is included in DE models but not in US models – and goes as far as the heating, which can sometimes be left out for small cars in the Arab market. Maybe there is a middle ground between the self-sacrificing, self-understanding and shopping universal genius and the dumb 3-shift worker who orders the city villa from the catalog? What does he benefit from the fact that material prices first rose by 300% and are now falling by a few percent on selected special items? If I want to build a house and tell the general contractor, "Hey, please remove the pipes from the invoice, I still have some left," how much do I save and how hot are my ears after the GC lets go of them again?