The Limited Times

Now you can see non-English news...

VdW board on the real estate market: "We need twice as much funding"

2022-12-06T10:58:31.148Z


VdW board on the real estate market: "We need twice as much funding" Created: 12/06/2022 11:42 am By: Sebastian Hölzle "Since the energy crisis, the mood in the housing industry has been pretty gloomy," says VdW board member Hans Maier. © Melissa Erichsen/dpa What's next for the real estate market in the Munich metropolitan region with its extensive commuter belt? In an interview, VdW board me


VdW board on the real estate market: "We need twice as much funding"

Created: 12/06/2022 11:42 am

By: Sebastian Hölzle

"Since the energy crisis, the mood in the housing industry has been pretty gloomy," says VdW board member Hans Maier.

© Melissa Erichsen/dpa

What's next for the real estate market in the Munich metropolitan region with its extensive commuter belt?

In an interview, VdW board member Hans Maier analyzes the situation.

Munich – Something unusual is currently happening on the Bavarian real estate market: sales are falling, projects are being postponed, purchase prices are falling.

Inflation and uncertainty in the wake of the Ukraine war have left their mark.

What does this mean for prospective buyers?

builders?

investors?

homeowner?

What's next for the real estate market in the Munich metropolitan region with its extensive commuter belt?

We spoke to a number of experts about this.

Today: The project developer.

Hans Maier is the association director and executive director of the Association of Bavarian Housing Companies (VdW) Bavaria.

The VdW is no ordinary real estate association: it represents the interests of socially oriented housing companies, including housing cooperatives as well as municipal and church housing companies.

Almost 500 housing companies are organized in the VdW, together they manage 540,000 apartments in Bavaria, including 107,000 social housing.

"Liquidity in the company is declining, investments are being scaled back"

Your member companies manage more than half a million apartments in Bavaria.

What's the mood like there?


Since the energy crisis, the mood in the housing industry has been pretty gloomy.

The sharp rise in gas prices will have a severe impact on tenant households, but also on housing companies.

Our housing companies buy energy from the utilities and we have to pass these costs on to the tenants.

The gas price cap will only partially solve this problem.


Why only "in parts"?


Twelve cents per kilowatt hour can still be three to four times the down payment for a tenant.

I know of a tenant who used to pay 90 euros a month, now he should pay 490 euros.

But even after the introduction of the gas price cap, it's still 270 or 360 euros.


Is that the exception or the rule?

We have such examples wherever the gas contracts expire at the end of the year.

Only 25 percent of our member companies have a contractual price guarantee until 2024 or longer.


Are the socially oriented housing companies under particular pressure?


With us, the majority of tenants are actually in the lower income segment.

200 or 300 euros a month in additional costs is a lot of money.

However, the housing company pays in advance when purchasing energy.

If it happens that the tenant cannot pay the advance payment, the company is left with the costs.


What is the consequence?


Liquidity in the company is declining, investments are scaled back.


also read

When the 300 euros of the energy flat rate really end up in pensioners' accounts

Property tax “unconstitutional”: law professor advises owners in several federal states to sue

A mass phenomenon?


We conducted a survey among our member companies: According to this, 58 percent want to limit their investment activities - this also affects new construction projects.


"One problem is that we in Germany are not exactly world champions in serial construction"

However, the federal government wants 400,000 new apartments to be built in Germany every year.

The goal cannot be achieved under the current framework conditions, especially since a quarter of these 400,000 apartments are to be subsidised.

Is expensive energy the only problem?

no

Construction costs are high, material shortages and disrupted supply chains have made construction more expensive.

In addition, the rise in interest rates is noticeable.

The problem is that state funding is not adapted to these new framework conditions.


Does that mean that the federal, state and local governments should actually spend more money?


That's the way it is.

Of the federal government's goal of building 100,000 subsidized apartments every year, a maximum of half can be achieved under the current subsidy rules.

In the coming year, the federal government will spend 2.9 billion euros on subsidized housing, and the states will spend about the same.

But we need twice as much.

Especially since improvements must also be made in privately financed housing construction.

what to do here


Set tax incentives, rethink the whole property policy and speed up the approval process.

Because there is a problem here too.


How long does a new build currently take?

From the green field to the finished building about 48 months.


How can the new construction be accelerated?

One problem, for example, is that we in Germany are not exactly world champions in serial construction.


However, the prefab buildings from the 1950s and 1960s are not always a pretty sight.


Serial construction in 2022 has nothing to do with prefabricated buildings.

Today, serial construction means: Everything is planned on the computer, individual modules can be put together as desired, like Lego bricks.

This is not only cheaper, but also faster to build – and the building can still be designed very individually.

When you walk past such a building, you don't see that the house is serially manufactured.

The Netherlands are already doing this today, but we haven't gotten that far across the board yet.


“It may take another 30 to 50 years before you see real effects here”

Germany likes to see itself as a technology pioneer.

But we are not.

Clients, contractors and planners have to work much more closely together - and become more open to technology.


What is wrong with property policy?


There is not enough land for housing.

So the topic of adding storeys – i.e. new floors for existing buildings – or densification would have to be made easier.


What are the effects of higher interest rates?


Eleven months ago we paid 0.7 percent interest, now we're at 4.1 percent.

Assuming a new building costs five million, I need around one million euros as a loan.

If I recently paid 7,000 euros in interest, it is now 41,000 euros.

The first project developers are no longer building.

Do you know of projects that have been postponed?


Yes, but the housing companies don't want to see your name in the newspaper.

It is clear that living space remains scarce.

Therefore, rents continue to rise, and there will be no relief for the next few years.


Is there any good news?

There is a renaissance in municipal housing.

We currently have five municipalities that we are helping to set up municipal housing developers.

This is particularly the case in the Munich metropolitan region.

It is also positive that the allocation of concepts has increased.


What is that exactly?


If a municipality sells a property, the investor with the most expensive offer no longer receives the property, but the one with the best concept.

If that were not the case, socially oriented housing companies, especially housing cooperatives, would have no chance.

In Munich, all plots of land are now actually going to new owners after the concept has been awarded.


What about private property sales?


If the city creates new building rights, the Sobon, i.e. socially just use of land, takes effect.


What does that mean?


This means that the buyer must make part of the residential building area available for subsidized housing.


As positive as that sounds, it doesn't seem to help much.

Nevertheless, rents in the greater Munich area have risen rapidly in recent years.


In fact, these positive developments do not solve the acute problem of housing shortages.

This would require an even higher proportion of subsidized housing.

What cities like Munich are doing right now are strategic projects designed for decades to secure long-term access to the apartments.

It may be another 30 to 50 years before you see any real effects here.


Source: merkur

All news articles on 2022-12-06

You may like

News/Politics 2024-01-29T16:18:55.190Z

Trends 24h

Latest

© Communities 2019 - Privacy

The information on this site is from external sources that are not under our control.
The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.