European housing construction plungesSelected results of the Euroconstruct summer conference 2009

Since the outbreak of the financial crisis in 2007, residential construction in Europe has been declining. The financial and economic crisis has also had an extremely negatively effect on the real-estate market. Prices for new housing construction have fallen and unemployment has risen in most European countries; at the same time banks have become increasingly restrictive in their lending policies. This has been a major contributor to the clear decline in construction activity. Especially in countries that built more than was required in the boom phase, the situation is especially bad since numerous unsold objects now burden the market. In addition to new construction, which is expected to weaken by about 20 percent this year in the appraisal of the 19 Euroconstruct institutes, the construction sector "renovation and modernisation" has also been affected by the crisis. Construction measures on existing housing units, however, are expected to decline by only about 3½ percent. Demand will remain weak into the year 2010. In 2011 at the earliest some recovery in the whole sector of residential construction will occur.