The war in Iran could exacerbate Germany's housing crisis, Housing Minister Verena Hubertz said on Thursday.

If Qatar were to halt liquefied natural gas production and the Strait of Hormuz were to be closed, this would inevitably have an impact on the prices of building materials, the minister explained at the Housing Construction Day in Berlin.

"This also means that the upturn in housing construction, which had just begun to emerge, will come under pressure once again," she added.

Fewer than 200,000 homes are expected to be completed this year, according to the the alliance of seven associations and trade unions organizing the industry summit on Thursday.

That would be only about half of the estimated demand and about 100,000 units fewer than in 2020.

The alliance also warned that the war in Iran could lead not only to higher construction costs but also to rising interest rates.

The industry sees the solution in cheaper construction with simplified standards.

Wolfgang Schubert-Raab from the Central Association of the German Construction Industry pointed out that sluggish housing construction is affecting the economy.

The sector generates €530 billion ($610 billion) in gross value added per year, he said. "It is an economic powerhouse, and it must not be allowed to grind to a halt."

The construction alliance is urging the federal and state governments to fund 100,000 new social housing units annually. Overall, planning and approval processes should be accelerated.