Market Trends of Germany Prefabricated Housing Industry
This section covers the major market trends shaping the Germany Prefabricated Housing Market according to our research experts:
Prefabricated Buildings are Witnessing Significant Growth
Prefabrication construction has been growing over the past few years, with more than 30% penetration of prefabs in the country compared to the United States. In addition, Germany is utilizing prefabrication to renovate outdated apartments and achieve net zero targets. One of the German factories is utilizing robots to assemble panels and mold them to fit precisely over the walls of an old apartment building. These panels have built-in insulation, which helps the building reduce energy usage significantly.
The renovation of the old building is gaining traction in the country, posing a major challenge in achieving net zero transitions. In addition, many outdated, inefficient buildings, which are a major source of global climate emissions, are driving prefab retrofitting in the country. In 2022, a German start-up named Ecoworks created a new system that takes a 3D scan of an old building, both inside and out, and creates a digital twin of the structure. This digital twin expedites the prefab panels manufacturing as per the requirement.
In addition, the factory produced prefab panels, including windows, ventilation, and channels for pipes. Also, manufacturers provide modular roofs with built-in solar panels, which can be installed in less than 20 minutes and convert the entire building into energy-efficient structures free from fossil fuels. Thus, the sustainability goals set by the country are driving prefab adoption. In 2021, there were more than 334,000 tons of prefabricated buildings (whether complete or already assembled), at a growth rate of 5% compared to the previous year.
Increasing Costs of Construction Driving the Market
The residential building construction costs continuously rose in Germany, driven by high international demand. In addition, construction material prices are spiking in the country due to limited transportation capacities. In November 2021, according to the Federal Statistical Office statistics, conventional residential building construction witnessed a growth rate of 14.4% compared to the same month in the previous year. The rising costs of conventional construction are driving the adoption of prefabricated structures in the country.
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 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%) rose significantly.
The high demand for land and shortage of materials are also increasing construction costs. Currently, prices are growing more sharply than 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 fuelling the prefab structure market in the country.
