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Rising Interest Rates Pull the Plug on the Construction Industry

Author

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  • Michelsen Claus

Abstract

The environment for investment in housing construction has changed drastically. Rising interest rates and construction costs are leading to a significant decline in investment activity. This will exacerbate the shortage on the housing market, as refugees from Ukraine also require housing on a significant scale. Clever solutions are needed to allow additional housing construction under the new conditions.

Suggested Citation

  • Michelsen Claus, 2023. "Rising Interest Rates Pull the Plug on the Construction Industry," Wirtschaftsdienst, Sciendo, vol. 103(1), pages 16-19, January.
  • Handle: RePEc:vrs:wirtsc:v:103:y:2023:i:1:p:16-19:n:9
    DOI: 10.2478/wd-2023-0009
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    More about this item

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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