Construction Permits in EU Plummet in 2022: Impact on Real Estate Market and Social Conflict in Luxembourg, Austria, and Estonia

2023-06-01 18:11:32

After jumping 15% in 2021, the number of square meters allowed to build fell by 5% in the EU in 2022, Eurostat said. And the country most affected by the tumble is Luxembourg (-27.5%), ahead of Austria (-24.1%) and Estonia (-21.9%) while conversely, Spain shows a dizzying percentage increase (+41%). Our Belgian and German neighbors are also in the red (respectively -15.3% and -7.6%) while permits in France increased by 1.8%.

In 2022, the Grand Duchy thus authorized the construction of 1.3 million m², including 700,000 in the residential sector. This is below the level of 2020, the year of the pandemic (1.7 million m²) and it is simply unheard of since… 2005 (1.2 million m²).

One more figure that paints an already dark situation in the sector: at the end of the year, professionals sounded the alarm and indicated that the production of housing units might fall by almost 40% in 2023 A decline in activity which further strains relations between employers and employees. A social conflict is more and more likely: the unions are now demanding better pay and the renewal of the collective agreement, and deplore the fact that the bosses are dragging their feet.

On the real estate market, the situation is bogged down: interest rates having exploded, households can no longer access property and prices collapsed in the 2nd quarter, reported atHome.lu on Thursday.

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