As of: February 13, 2024, 8:19 a.m
By: Peter Sieben
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Press
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Real estate is becoming more expensive and rental prices are rising.
Criminals contribute to price increases and certain sectors of the economy benefit from this.
Berlin – In some regions of Germany, pure living is already a luxury.
After a downward trend, real estate prices across Germany are increasing again, and rental costs have also recently risen sharply, according to the German Economic Institute (IW).
This is particularly true in metropolises such as Hamburg, Cologne or Berlin.
Rental costs here have doubled in some cases over the past 15 years, and purchase prices have even tripled in some areas.
In particularly sought-after locations, the price jumps are even greater - and criminals often help increase the price.
Real estate prices: Criminals use houses to launder money
Criminals and organized crime gangs use real estate to “launder” ill-gotten money.
It is estimated that around 100 billion euros of illegal income in Germany is turned into supposedly legal money in this way every year.
“Up to 30 percent of dirty money ends up in real estate, which drives up real estate prices, especially in large cities.
“This ultimately affects all citizens,” said Sebastian Fiedler, criminal policy spokesman for the SPD parliamentary group, to
IPPEN.MEDIA
.
Although the 30 percent figure is controversial, experts agree that a significant portion of illegal money is invested in real estate.
Kilian Wegner, professor of white collar criminal law at the European University Viadrina in Frankfurt/Oder, who deals intensively with the problem of money laundering, explains why real estate is so popular with the mafia, criminal clans and drug lords: “The value of real estate is, Relatively difficult to determine, especially in a dynamic market situation and when standard objects are not involved.
Criminals can easily manipulate prices,” he says.
“Anyone who wants to buy a house in Germany is competing with criminals from all over the world”
Studies suggested that money laundering artificially inflates property prices.
It can be advantageous for money launderers if real estate is as expensive as possible.
This allows them to launder larger amounts of money.
One way: “You can overstate the value of a property acquired through illegal means in order to take out the highest possible bank loan and thus maximize the economic benefit from the income,” explains Kilian Wegner.
Criminals can then use illegal money to repay the large loan.
“If you want to buy a residential building or commercial property in Germany, you are probably competing with criminals from all over the world.”
Christian Trautvetter from the Tax Justice Network sees it similarly.
Among other things, he worked as a forensic auditor and dealt with money laundering.
“Big cities are hubs for international potentates.
A public prosecutor from Munich once told me: “It can’t be the case that I can’t afford an apartment because Russians are buying up everything here,” says Trautvetter.
Oligarchs from Russia are purchasing high-quality real estate in Berlin and other cities
Russian oligarchs, for example, also acquire high-quality real estate in Berlin and other cities in order to “launder” money from questionable sources.
It is difficult to estimate exactly how high the amount of money laundering and thus the impact on real estate prices is.
“The police, for example, know very well how big the cocaine market is.
When it comes to cocaine alone, profits worth three billion euros are being laundered somewhere,” says Trautvetter.
There are no such figures for other areas.
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The police also do not have a complete overview of the extent of money laundering by large organizations such as the mafia.
“So far, law enforcement has only reached local medium-sized businesses, such as the clans known to the police.
Professional money laundering has barely been recorded so far,” says Trautvetter.
In other words: the number of unreported cases is high.
Trautvetter believes that the influence of “dirty” money on real estate prices is in the single-digit percentage range.
With prices per square meter of over 9,000 euros in some areas of Berlin, for example, this is definitely noticeable.
Money laundering: Difficult to arrest perpetrators
In Germany it is quite difficult to hold owners of money laundering houses accountable.
Because: “If you want to prosecute someone for money laundering, you need a concrete initial suspicion.
To do this, the crime from which the money originally comes must be known at least in rough outline,” explains lawyer Kilian Wegner.
He demands: “There needs to be an authority that ex officio also checks dormant capital for suspicious reasons.” In the case of real estate, for example, such an authority would have to check whether it is actually attributable to the person who is entered in the transparency register as the beneficial owner.
And whether there is any evidence that this person may not even exist and is just a front man for unknown people behind the scenes.
Paradoxically, money laundering causes massive harm, but also benefits some circles.
“Money laundering is an economic factor in Germany,” says Wegner.
“Let’s take a shipbuilder who makes yachts.
If he always checked carefully where his customers’ money came from and whether they were acting legally according to German standards, he would soon have nothing left to do.”