Germany sees sharp rise in residential construction costs in May 2026

The Federal Statistical Office reported that the price index for new conventional residential buildings in Germany rose by 5.0% in May 2026 compared with May 2025, accelerating from a 3.3% increase recorded in February. Core construction trades saw notable jumps: concrete work +3.6%, masonry +3.8%, while roofing, carpentry and timber work each rose by 7.3%. Expansion works such as heating systems and heat pumps climbed 5.1%, and metal work increased 4.4%. Renovation and maintenance costs for existing residential buildings were also higher, up 5.6% year‑on‑year.

Regional data from Saxony‑Anhalt showed an even steeper rise of 6.2% for new residential construction, with drainage works jumping 10.2% and earth‑work up 10.0%. The broader price pressure is attributed to higher material costs—bitumen, steel and insulation—driven by the Russia‑Ukraine war and the ongoing Iran conflict, as well as rising energy prices.

Federal Building Minister Verena Hubertz announced a package of measures aimed at curbing the trend, including greater digitisation of building processes, faster permitting, simplified funding programmes and a draft law for “building type E” to lower standards and costs.