The full drama of the supply gap in the housing market will only become apparent in about two years, says Reiner Braun, head of the real estate analysis company Empirica, in an interview with the news portal ntv.de. Then most of the development projects currently underway will be completed and the current slump in construction starts will be reflected in the market. Even high earners will find it difficult on the housing market.
Braun does not see the interest rate turnaround as the actual cause of the misery. For years, the low interest rates only masked the fact that the municipalities allocated too little building land and that the legislature had made building “extremely more expensive” with ever stricter regulations.
Commentary by Frank Wojtalewicz
I agree with Mr. Braun that the financing costs are not the cause of the housing shortage, but rather the obstacles that legislators and authorities put in the way of those willing to build. Three to four percent interest rates aren't really much in the long term. If hardly anyone wants to build now, it is because the costs of bureaucracy have risen continuously over the last few decades. Building in Germany will only become more interesting again when the Augean stables are cleared of unnecessary or excessive regulations. However, this is a Herculean task that governments have so far shied away from.
CEO
d.i.i. Deutsche Invest Immobilien AG