Market Trends of Germany Prefab Wood Buildings Industry
This section covers the major market trends shaping the Germany Prefab Wood Buildings Market according to our research experts:
Timber Buildings Witnessing Significant Growth
Timber structures are witnessing significant growth in Germany, to achieve net zero emission targets. Currently, wood emerging as a primary building material, not only for detached residential housing but also for multi-family and commercial urban structures. In addition, increasing emphasis on the environment and emission controls drives the demand for wooden prefab buildings' adoption over conventional constructions.
Moreover, in 2022, wooden modular construction witnessed lucrative growth, majorly due to increased sustainability requirements and the cost-effectiveness of prefabricated wood-based modules. In addition, Berlin is emerging as a hotspot for the wooden prefab industry. For instance, in 2022, three-story wooden schools are being built in Berlin by Austrian prefabrication constructor Kaufmann Bausysteme.
In addition, the Senate Department for Urban Development & Housing planned the construction of 32 wooden prefabricated schools by the end of 2025. The department has chosen an offsite construction method with prefabricated modules to reduce the construction time by half. Moreover, the school comprises of nearly 100 modules, each 3-m wide and 8-m long. All modules were prefabricated offsite and assembled on the construction site. However, in 2021, to meet the growing demand for prefabricated structures, more than 334,000 tons of prefabricated buildings (whether complete or already assembled) were imported into the country, at a growth rate of 5% when compared to the previous year.
Increasing Costs of Construction is Driving the Market
In 2022, according to the federal statistical agency, Germany is experiencing a shortage of housing supply despite the growing demand. In November 2022, more than 16% of the German construction companies in Munich suffered the cancellation of building projects, and on the contrary new home building demand increased to 14% in October 2022. In addition, raw materials inflation is high in the country, further fueling construction costs.
Meanwhile, the major reason behind the construction prices spiking was the rise in prices of building materials. In January 2022, wood, steel, and insulation materials became expensive when compared to the previous year. In addition, in terms of structural work, the prices for carpentry and wood construction witnessed a growth rate of more than 38%, additionally, roofing and roof waterproofing (17%), plumbing (16%), and concrete work (16%) also rose significantly.
Moreover, the high demand for land and shortage of materials are further increasing construction costs. Currently, prices are growing more sharply than they have in over five decades. In addition, most of the construction and civil engineering companies experienced supply shortages. Thus, the supply shortages in construction materials and rising costs are bolstering the demand for wooden prefab structures in the country.
