Market Analysis
BBU on construction costs and building code
BBU warns: new building regulations to raise Berlin construction costs by EUR 27,000 per apartment
The BBU projects a 17 percent rise in construction costs for 2016. Berlin's revised building code and the next phase of the EnEV would push a 75 sqm apartment to a cost rent of EUR 12.50 per sqm.
Peter Guthmann
BBU board member Maren Kern warns of a cost surge in Berlin's residential construction. An average 75 square metre apartment would cost up to EUR 27,000 more in 2016. That is an increase of around 17 percent, pushing the calculated net cold rent to EUR 12.50 per square metre. Per tenant household, it means an additional EUR 1,300 per year.
Building code: accessibility requirements as cost driver
The main cause, according to Kern, is the revision of Berlin's building code. The new rules require one third of all new build apartments to be built barrier free. From 2020, the share is set to rise to 50 percent. The higher space requirements and planning effort add up to ten percent to construction costs, roughly EUR 16,000 per apartment. "After the sharp increase in property transfer tax last year, the revised building code will now deliver the next state imposed cost surge for housing," Kern said.
EnEV 2016: another seven percent
From January 2016, the next phase of the Energy Saving Ordinance (EnEV) takes effect. Stricter energy standards for new builds add up to seven percent in additional costs according to the BBU. Together with the building code changes, this accounts for the projected 17 percent increase.
Impact on Berlin's market
Rising construction costs push many projects toward the higher price segment. Affordable new builds become harder to realise. In sought after locations like Mitte or Neukoelln, this adds further pressure on those looking for apartments.
Kern calls for practical solutions
Instead of rigid requirements, the BBU board member advocates flexible approaches: step free access, level entry showers and larger movement areas would suffice in most cases. A practical definition of barrier free design could reduce construction costs without diminishing the benefit for older residents. "For affordable housing to be built for everyone, building standards need to come down, not go up," Kern said.