BERLIN, Jan 10 Reuters The outlook for Germany39;s construction sector is grim for 2024, according to two prominent research institutes on Wednesday, a further bad sign for the nation39;s struggling property industry as it suffers its worst crisis in decades.

German construction spending is set to fall in 2024 for the first time since the financial crisis, according to a study by the DIW economic institute.

A separate survey by the Ifo economic institute showed sentiment in residential construction at an alltime low.

For years, the property sector in Germany and elsewhere in Europe boomed as interest rates were low and demand was strong. But a rapid rise in rates and costs put an end to the upsurge, pushing some developers into insolvency as bank financing dried up and deals froze.

The slump in the construction industry is taking longer than expected, said Laura Pagenhardt, an author of the DIW study.

Construction volume will shrink by 3.5 in 2024 to 546 billion euros 597.38 billion before recovering slightly with a 0.5 increase in 2025, DIW said.

The last time that German construction spending declined was in 2009.

The Ifo survey showed sentiment in residential construction dropped to 56.8 points in December, worse than 54.4 points in November. It was the lowest level since Ifo began tracking the index in 1991.

The prospects for 2024 are bleak, said Klaus Wohlrabe, head of surveys at Ifo.

Germany has been falling short of its efforts to build 400,000…