The Tyrolean construction industry is in crisis. “Our economic survey shows slumps in both the order situation and order expectations. “We have the worst survey results in 5 years,” says Patrick Weber, state guild master for construction in Tyrol, more than worried. Rising wage costs, high interest rates and tighter credit conditions are putting the industry and builders under massive pressure. The consequences are serious: less living space, rising prices and an increasing threat to the existence of construction companies and employees.
Housing shortage
In the first quarter of 2024, fewer building permits were issued than in at least 14 years. While around 2,000 to 2,400 construction projects were approved per year between 2010 and 2021, in 2023 there were only 1,200. The first quarterly figures for 2024 show a further decline to less than half. “The order situation from architecture and planning offices is sometimes worrying. What is not planned today cannot be approved tomorrow and subsequently cannot be built,” warns Lukas Hundegger, member of the state construction guild. This development is exacerbating the housing shortage and driving up prices, and in the future there will not be enough skilled workers to create the urgently needed living space. 10,000 construction workers across Austria have already lost their jobs.
What is not planned today cannot be approved tomorrow and subsequently cannot be built
Changes in housing subsidies
The Tyrolean Building Guild is calling on politicians to act quickly and decisively. The creation or acquisition of condominiums must be made easier through low-interest loans. “We are calling for the introduction of subject funding in housing subsidies based on the Vorarlberg model or a housing loan of 200,000 euros at 1.5% interest for all Tyroleans who want to create or buy living space,” says Patrick Weber.
Prioritize investments in infrastructure
Municipalities and the public sector must urgently bring forward planned investments. Above all, the construction of childcare facilities, schools, roads and infrastructure must be progressed as quickly as possible. “The federal government has made 2.4 billion euros available with the future fund and the community billion – now Tyrol must act,” demands Lukas Hundegger.
open them all
Why are the strict rules for loans problematic?
Because the requirements of the so-called KIM regulation of a minimum of 20% equity and a maximum of 40% repayment rate mean that, especially for younger people, they cannot create property for themselves. At the same time, however, they have to spend ever increasing amounts on rent. That is too short-sighted.
Are more funding for construction a solution?
We don’t need funding for everything, we need a significant reduction in bureaucracy, more freedom for companies and relief from taxes. The state could quickly and easily provide a major boost to affordable housing by significantly reducing taxes and fees on the first property.
Are there examples that Tyrol can learn from?
Vorarlberg has an innovative and effective model when it comes to housing subsidies. South Tyrol is exemplary when it comes to deadlines in the construction process. Vienna is one step further when it comes to digitalization. We can adopt many things that have already been successfully tried out in our neighborhood
5 points for affordable housing
In recent years, construction has become 25 to 30% more expensive due to supply bottlenecks, price increases and higher interest rates. This makes it more difficult to create affordable housing. The Tyrolean Building Guild has developed a 5-point program for affordable housing. This package aims to reduce manufacturing costs. This would be achieved, for example, by eliminating or at least reducing underground components, which account for up to 30% of the construction costs. Savings can also be achieved with systematic construction. This involves efficient floor plans, slim static constructions and standardized details. Increasing building density is another way to save land and at the same time implement residential buildings efficiently.
Only through decisive political action can we overcome this crisis and secure the future of Tyrol
Digitalization as a process boost
A major lever lies in the consistent digitalization of approval procedures, combined with clearly defined maximum deadlines. The lead times for residential buildings in Tyrol are currently more than 3 years. These processes must be significantly accelerated in order to address the housing shortage. There is also a lot of potential for improvement in the building regulations themselves: the specifications for the construction industry have become increasingly extensive and complex in recent decades. There are sensible goals behind numerous laws and regulations, such as energy efficiency, accessibility or fire protection, but they often overshoot the mark. In addition, an impulse can be provided with a VAT exemption and interest subsidies for main residences. “The Tyrolean construction industry urgently needs support to avert the impending collapse and at the same time secure affordable housing. Only through decisive political action can we overcome this crisis and secure the future of Tyrol,” emphasizes guild master Patrick Weber in conclusion.
