Business Survey Findings: Assessment of the Business Environment in the Housing Sector
The ifo Institute, a leading economic research organisation, released a report on September 19, 2025, revealing that the housing market is still grappling with weak demand. Klaus Wohlrabe, head of ifo surveys, stated that the cautious uptick in sentiment seen in recent months has continued to stall.
The ifo business climate index for the housing market in September dropped from -24.2 points in August to -26.3 points. This decline indicates a further deterioration in the business climate of the housing market. Companies' expectations for the coming months and assessments of the current situation have both worsened.
Simultaneously, the cancellation rate in the housing market rose from 8.2% to 8.5%. Despite a slight decrease in the share of firms with order shortfalls from 46.1% to 45.7%, the level remains high. Wohlrabe emphasized that the housing market needs to remain patient, as it will take more time for the increase in building permits to reflect in order volumes.
The report also highlighted that the intended political measures in housing construction that have so far shown little effect are regulatory interventions such as rent controls and building regulations. Wohlrabe stated that there's still room for improvement in housing construction loans.
The ifo Institute's findings underscore the challenges facing the housing market. Despite the efforts to stimulate growth, the market continues to struggle with weak demand. Companies in the housing market are urged to remain patient and continue to seek ways to improve their business operations in the face of these challenges.
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