(Bloomberg) -- Germany’s housing crisis risks intensifying as nearly half of the country’s builders complain of insufficient orders and more than one in 10 report financial difficulties.
In November, 49.1% of developers said they were suffering from a lack of new orders, up from 48.7% in the previous month, according to a survey by the Munich-based Ifo institute. That represents the eighth increase in a row and the highest level since records began in 1991.
The number of companies in financial straits rose to 11.1% from 9.9%, according to a statement on Monday.
“Home builders are losing customers in droves.” said Klaus Wohlrabe, head of surveys at Ifo. “The mood among the companies surveyed remains icy.”
Surging construction costs and higher interest rates are making many projects unprofitable, and the strain on builders could hit long-term construction capacity and intensify shortages. Chancellor Olaf Scholz’s ruling coalition has failed to hit a target of building 400,000 homes a year.
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Companies reporting order cancellations eased slightly to 21.5% from 22.2%.
Business confidence in the home-building sector though hit a record low, according to the survey. With most responses coming in early November, the impact of the insolvency of Austrian property mogul Rene Benko’s Signa is yet to be seen, according to the report.
“There is no improvement in sight,” said Wohlrabe.
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