The construction minister expects real estate construction to decline this year.
(Photo: IMAGO/Michael Gstettenbauer)
Berlin The federal government plans to restart home ownership promotion for families in the summer. “The corresponding KfW program with low-interest loans should be available from June 1st,” said the Federal Minister for Housing, Urban Development and Construction, Klara Geywitz, in an interview with the newspaper “Welt am Sonntag” according to a preliminary report. “350 million euros per year are available for this.” The money will be passed on via low-interest loans. Families with an income of up to 60,000 euros per year should be eligible for funding, plus a further 10,000 euros for each child.
The building minister expects further declines in residential construction overall. “For single-family homes, we see a significant slump in applications,” said Geywitz, referring to a special effect due to the expired child benefit subsidy. “In the case of multi-family houses, there is even a slight increase. But the bottom line is that I assume that we will have fewer applications this year than last year.” The reason for this is capacity problems in the construction industry, but also material bottlenecks.
Despite the weak housing construction, Geywitz rejected further demands for additional subsidies. “I can’t see any direct connection between grants and completions,” says Geywitz. “If there were, we would have had to have incredibly high numbers of new builds in 2022. Because in the years before that, billions of euros were paid out in the new construction sector via the Federal Funding for Efficient Buildings (BEG), and the trend is rising. But that hasn’t been reflected in rising completions at all.” If the state gives a lot of subsidies to a market “with limited capacities”, this does not necessarily lead to higher quantities.
“And some actors have not used state subsidies for cheap rents, but may have increased their own project margins with it,” says Geywitz. She referred to the 14.5 billion euros that the federal government is making available for social housing construction by 2026, “which is currently often overlooked”. These funds would probably “flow out to 100 percent”. The federal government is also working on a new non-profit housing scheme: “We want to present a concept for this in March.”
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More: Berlin-Hyp expects that buyers will only be able to prepare for falling prices in the next few months. Times are getting tougher for renters.