The German real estate sector will request billions of Euros as government support during the upcoming meeting with Chancellor Olaf Scholz, as reported by Reuters (citing sources familiar with the matter).
A meeting with politicians, ministers and industry representatives at the Chancellor’s office is scheduled for September 25, 2023. It will address issues related to housing shortage in the most densely populated country in Europe, as well as the property crisis exacerbated by plummeting prices. Sources added that industry representatives will be advocating for support in the form of radical tax incentives and other measures, reflecting the growing concern within the German Real estate sector.
Other demands include freezing of property sales tax, as well as low-interest financing program to support construction of new housing. Andreas Mattner, the President of the German Property Federation, insists that the government should temporarily freeze property sales tax and calls for a low-interest credit program to support new housing construction. “I am concerned that we are in a deep housing crisis. And a real estate crisis requires clear, structured and radical steps to overcome it,” said Mattner.
Tim-Oliver Müller, the head of the German Construction Industry Federation, also emphasizes the need for a set of emergency measures, which will include the sale of state-owned land at reduced prices for the construction of rental housing.
For many years, the real estate market in Germany has been considered a haven and has attracted foreign investors. However, according to consulting company JLL, in the first half of 2023, the number of transactions fell by 59% compared to the previous year. As of now, the largest economy in Europe is facing significant shifts in trends following the end of the era of cheap money, which fueled a decade-long real estate boom. Now, the industry is threatened with bankruptcies, shrinking deals and falling prices.
Housing prices decreased by 6.8% in the first quarter of 2023, marking the largest decline since the German Statistical Office began keeping records. The stability of Europe’s largest economy is at stake, where the real estate sector contributes about one-fifth of the GDP and one-tenth of the workforce.
