Rising property prices
Building society boss expects “social explosives”
06.07.2024, 14:27
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The dream of owning your own home is becoming increasingly unattainable for many people. The head of the Schwäbisch Hall building society blames politics for this. He demands that “proactive action” be taken – and quickly.
In the opinion of the head of the Schwäbisch Hall building society, rising property prices have the potential to be “a massive social dynamite”. “80 percent of people want to live in their own four walls. This also applies to the younger generation of 20 to 30-year-olds,” said CEO Mike Kammann to the “Südwest Presse”. “It’s the end of a lifelong dream. It’s disillusioning people.” He suspects that politicians will try to treat the symptom with laws – for example a rent cap – instead of tackling the root of the problem.
After reunification, around 700,000 housing units were completed in Germany each year, said Kammann. There was an oversupply and prices had fallen. “Now we need to make full use of all capacity. We have enough potential,” he said. “But the way things are, we will have to live with a real estate shortage plus rising rents over the next ten years. This cannot be stopped if we do not act proactively now.” However, he does not expect any impetus in the next twelve months in view of the upcoming federal election.
Energy renovations are difficult to calculate
When asked about the lack of investment by millions of households in energy-efficient renovations, the building society boss replied: “Customers generally do not think ideologically. The point of ‘doing something good for the environment’ is a priority in politics, but comes third for private customers.” They first ask themselves whether the investment is worthwhile – in two ways: “Can I save on heating costs with it?” or “Will my house be more valuable if I have to sell it at some point?” If the investment only pays off after ten years, owners will not take action. “In addition, the funding conditions change regularly and are not reliable.”
The renovation of old properties in particular is a stressful, time-consuming and costly factor – sometimes not even calculable. “The math only works if targeted funding programs can be used that the buyer can rely on,” said Kammann. “In the past, that was the exception rather than the rule, and financing is already shaky.”