What does the war in Ukraine mean for the real estate industry in Germany?

The war in Ukraine has consequences - especially in the energy sector. Fears may be justified or even necessary to raise awareness. Market experts and specialists have thought about what effects can be expected in the real estate industry.

Historians know from past wars that acute crises increase the value of material assets. This applies to gold and works of art just as much as to real estate. Banks, however, will apply stricter standards to all investments, which will have an impact on interest rates. Whether Germany will continue to be a country favoured by real estate investors because of its high level of security remains to be seen.

However, it is important to bear in mind that attractive investment opportunities that offer a comparatively low risk like real estate with a good return and stable performance are rare. This speaks for a continuing high demand for real estate and at least for stable, but probably further rising real estate prices.

The challenges facing the industry, which were already apparent before the war, could become more acute. These include above all the bottlenecks in building materials and skilled labour. The target of 400,000 new dwellings per year is very ambitious under these conditions. The already tight real estate market due to the shortage of housing supply will come under even more pressure from the large influx of refugees.

Measures to improve the energy efficiency of buildings take on an additional urgency as a result of the war: anything that serves climate protection, such as moving away from fossil fuels, also promotes independence from energy imports from Russia. This in turn reduces Germany's susceptibility to blackmail and turns off the money tap for the attack on Ukraine.

The enormous increase in energy costs makes it clear to every single consumer what is at stake. The willingness to take energy-saving measures at every conceivable point is increasing.

(Photo: © Erich Westendarp, Pixabay)