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Break in construction (icon image)
Photo: Bodo Schackow/ dpa
Due to the rising construction costs and interest rates, the real estate group Vonovia is pulling the ripcord and stopping all new construction projects planned for the current year.
“We will not have any new construction projects starting this year.
Inflation and interest rates have risen enormously and we can't close our eyes to that," said Vonovia CEO Daniel Riedl of the "Westdeutsche Allgemeine Zeitung".
Plans in Berlin and Dresden are particularly affected.
"For properties that we used to be able to offer for twelve euros per square meter without rent, we would now have to go towards 20 euros in order to recoup our costs of 5000 euros per square meter," said Riedl.
These rents are "completely unrealistic" in large parts of Germany.
In order to cover the nationwide demand of 700,000 apartments, rents of eight or nine euros are also necessary.
The federal government must intervene and provide clear funding guidelines and promote the digitization of building applications.
In November, Vonovia boss Rolf Buch had already reduced the investments for the new building to around 350 million euros below the previous year's values, referring to the increased costs.
The general manager of the main association of the German construction industry, Tim-Oliver Müller, had recently warned that the urgently needed new housing construction would be slowed down by the cost explosion.
"Many projects were initially put on hold or even cancelled," he said.
kig/Reuters
