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Finding skilled workers is a bottleneck in construction. Photo: edella / Shutterstock. Finding skilled workers is a bottleneck in construction. Photo: edella / Shutterstock.

Building costs and their predictability

Irmelin Ehrig
Irmelin Ehrig
trade editor & press officer building/real estate, CEO

Between 2007 and 2017 building costs in Germany increased by about 33%, the costs of the building services alone were up 12% just in the last few months. Thus, the panel discussion “Building costs and their predictability” of the Expo Real Forum on Monday, October 08, 2018 focused on the question whether and, if so, how building costs can even be calculated reliably in view of these developments. The discussion took up different perspectives––that of the general contractor, the project developer and the financing bank. The panel consisted of:

  • Roswitha Loibl (panel chair)
  • Marcus Becker (Kondor Wessels Bouw Berlin GmbH),
  • Marc Bonner (pbb Deutsche Pfandbriefbank AG),
  • Rainer M. Schäfer (STRABAG Real Estate GmbH),
  • Jens Quade (Ed. Züblin AG) and
  • Martin Löcker (UBM Development AG).

 

Construction industry lacks resources

 

If building costs become a “bet on the future”, because they have already gone up considerably before the actual construction work even starts, this is a problem for everyone involved. The panel found that the reasons are mainly increasingly scarce resources––fewer staff as well as problems when it comes to even just finding a general contractor for the next construction project––but also the continually rising service charges and the long time it takes to obtain planning permissions, which are often granted after as many as two to three years, so that the calculated budget becomes  obsolete.

 

Building becomes more collaborative

 

The various parties involved attach different weight to the approaches usually taken in practice. Thus, banks mainly rely on closely observing the market and expect adequate buffers in project calculation, general contractors and developers enter closer cooperation and share the risks. The greatest difficulty, particularly for general contractors and subcontractors, is currently recruiting. Yet, there is also a positive effect of the resources problem, because building has become more of a collaborative effort, everybody seems to be more on an equal footing. If the interests of the subcontractors are taken into consideration, successful building is still possible. This includes planning certainty for the staff and in order processing as well as the early inclusion and knowledge of the particular constellation in the building project. The panelists expect further cost increases for the future, particularly since the staff problem will deteriorate considerably. To meet these requirements, three aspects are emphasized: selecting staff according to the new requirements and “looking after them” as well as approaching young people offensively and ensuring good training and education.

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