A forecast by the Euroconstruct research group, which includes the Munich Ifo Institute, suggests that the number of completed homes in Europe will likely reach its lowest point since 2015 in 2025.
According to the projections, there will be approximately 1.5 million new housing units, a 5.5 percent decrease from the previous year. However, a 3.0 percent increase is expected for 2026.
Germany is expected to experience a decline, with the potential for only 175,000 new homes in 2026, a 15 percent decrease from the previous year. The high construction costs are currently hindering a rapid market recovery in the country, according to Ifo’s building expert, Ludwig Dorffmeister.
On the other hand, positive signs are emerging in Northern Europe, with the markets in Sweden, Denmark, Finland and Norway expected to recover strongly in 2025 and 2026, with increases of 12, 28, 23 and 13 percent, respectively. Poland is also expected to see a 10 percent increase in new housing units.
In contrast, Austria, France and Italy are expected to see a decline in the number of completed homes in 2026, with decreases of 9, 3 and 3 percent, respectively.
The European construction industry, on the other hand, is expected to continue growing, driven by significant public investments and long-term infrastructure projects, such as the expansion of transportation and energy infrastructure. However, this growth is likely to slow down by 2027, with a projected 1.5 percent growth, down from an average of 2.5 percent from 2017 to 2024.
The Ifo expert, Ludwig Dorffmeister, noted that the construction industry in Europe may have reached its peak after nearly a decade of steady growth and that the anemic financial situation of public coffers, combined with the increasing labor shortage, is likely to hinder the sector’s progress.