The spring report of the "Immobilienweisen" (real estate experts) has clear words and warns: In 2025, there will be a shortage of housing in the order of Bremen plus Saarland - 1.4 million people would then have no home. Investments are less attractive than they have been for a long time, and drastically increased construction prices and interest rates are "crumbling" many construction projects.
The commercial real estate market is considered robust in large parts, but the situation is coming to a head in residential construction, according to the ZIA, Zentraler Immobilien Ausschuss. ZIA President Dr. Andreas Mattner: "If we continue as before, we will no longer be able to avert a housing debacle in 2025".
In the spring report, Prof. Lars P. Feld presents the overall economic development. He assumes that rents, which are already rising, will continue to increase due to the high demand for housing. Government regulation would be counterproductive, however, because it would stifle urgently needed investment in new housing construction. Good approaches, on the other hand, would be to strengthen serial construction, as envisaged in the coalition agreement, and to unify or standardize building regulations across municipalities or states.
Prof. Harald Simons of empirica, author of the chapter "Residential Real Estate," points to the high net immigration of a total of almost 1.5 million people. This has led to a sharp rise in demand for housing. As a result, residential rents in the existing stock rose by 5.2 percent in 2022, somewhat more than in previous years.
Due to high construction prices, land costs and interim financing costs, the construction of new apartments "is usually no longer economically viable, as the attainable rents are below the cost rents and the sales prices can no longer be financed by the buyers due to the higher interest rates," says Prof. Simons.
Purchase prices for condominiums nationwide declined by a total of 3.2 percent from the second to the fourth quarter of 2022. In the A-cities, the decline has mostly been stronger, at 2.1 percent to 7.8 percent, according to Prof. Simons. His forecast: the high construction overhang still supported new residential construction in 2022 and could continue to do so in 2023. In the future, however, a new construction gap will open up.
(Photo: © ZIA, Zentraler Immobilien Ausschuss e.V.)
