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Business

The housing market no longer works

The location on the housing market is tense, there is a lack of cheap living space. In the meantime, even large investors are complaining: the real estate business is becoming increasingly complicated for them.

Ingo Nathusius

Even large investors who earn money with scarce goods are of the opinion that the German housing market suffers from too few cheap apartments. This is shown by a survey by the Ey of Economic Advisors under 150 funds, banks and real estate companies.

The managers of the real estate industry expect fewer people to give up and move their old apartment than before. “This is a sign that the housing market is not working properly at the moment,” said Paul von Drygalski from Ey. “We need affordable living space to a large extent,” says Florian Schwalm, partner of the business consulting company.

Subsidized social housing were built in the 1970s. The so -called social bond ends after 50 years; The owners can now rent at market prices. The EY real estate experts see this a reason for the tense market for cheap apartments.

High costs, expensive requirements

Also the obligation to convert old houses so that they have to be heated less – keyword: “energetic renovation” – hinder housing. “This costs budgets that are no longer available for new buildings,” said Schwalm.

Von Drygalski cited high costs and state requirements as reasons why open spaces are no longer built up in cities and houses are increased – keyword: “densification”. According to the Federal Statistical Office, the construction costs have increased more than other prices: recently by 3.1 percent within a year.

Ey manager Schwalm indicated that private individuals are particularly reserved because there is no clarity about state promotion of housing construction. “Private individuals need security,” said Schwalm. The way from planning to the finished house is very long.

Peculiarities of the German rental market

According to the Federal Statistical Office, 58 percent of private households live in rental apartments and houses in Germany. The Bundesbank's latest wealth study also shows that eight percent of tenants also have property ownership. So you live for rent and have an apartment or house elsewhere.

The Federal Statistical Office shows that there are significantly more owners in the country, much less in cities. Private property ownership is also low in East Germany. This could also have historical reasons: residential property was unusual in the former GDR. There is still a lack of financial assets for home purchases. On the other hand, real estate prices in the east are generally low.

“City cities have a hard time”

EY data show that in all real estate markets only buildings in very good locations have a short -term view of value maintenance. In offices, tenants demanded more and more quality, discounts and special services. Modern offices can still be rented out in very good city center locations. Without attractive offices in a prime location, it is difficult for companies to lure their staff out of their home office again, said Ey partner Schwalm.

In retail, only grocery stores are actually worthwhile for investors. “Inner cities still have a hard time,” said von Drygalski. Shopping centers are still in decline. There are major shifts in logistics properties. More and more transshipment sites and stores are required; Since the trade with Russia has come to a standstill, there are shifts to areas near German ports, said Schwalm.

Large deals under pressure

The EY study shows that the real estate business is also difficult for professional investors. Last year, EY registered sales of over 35 billion euros. This means that the market is still far from top turnover in 2021 when large transactions of over 114 billion euros were published.

Many major deals of 2024 were characterized by economic pressure: the Bleit-based signa group of the Austrian company René Benko had to sell the Berlin department store KaDeWe for a billion euros. In the housing market, Vonovia sold real estate for 3.1 billion euros after Ey-Counting to reduce its oppressive debt.

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