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Good outlook for European residential construction in 2006

Author

Listed:
  • Erich Gluch
  • Erik Hornung

Abstract

For the current year a 2.6% growth in European construction volume is expected. With this key result, the Euroconstruct institutes - with the Ifo Institute as German member - have clearly revised their previous forecast upwards. A half a year ago, expectations envisioned an increase of construction investments of only 1.5% in 2006. However, the growth will weaken somewhat in 2007 and 2008, amounting to only about 2%. The strongest dampener will be in new residential construction, since in three of the large countries - France, Italy and Spain - the demand for new hosing units will decrease perceptibly. A significant role will be played by the strong increase in real estate prices in these countries in recent years. The perceptible increase in real estate prices had heated up housing demand for some time. With the now achieved high level of prices, investment propensity of both private households as well speculatively minded investors has faded rapidly.

Suggested Citation

  • Erich Gluch & Erik Hornung, 2006. "Good outlook for European residential construction in 2006," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 59(13), pages 16-20, July.
    • Handle: RePEc:ces:ifosdt:v:59:y:2006:i:13:p:16-20
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    File URL: https://www.ifo.de/DocDL/ifosd_2006_13_4.pdf
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    Citations

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    Cited by:

    1. Volker Rußig, 2007. "Home building in Europe at a record levelSelected results of the Euroconstruct winter conference 2006," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 60(03), pages 32-40, February.
    2. Volker Rußig, 2007. "New housing completions in Europe: Coming down slowly from the summit," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 60(14), pages 21-29, July.

    More about this item

    JEL classification:

    • L74 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Construction
    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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