In an interview with Handelsblatt, Rolf Buch, CEO of the largest German housing group Vonovia, commented on the current situation on the German real estate market and project development. He emphasized the prevailing excess demand in metropolitan areas, which makes new construction urgently necessary and will inevitably make rents more expensive. He left it open how much his company wants to increase the rents. He explained the lack of new building projects of his own with increased financing costs: a square meter has to cost 20 euros in order to be able to cover costs. One solution is government-sponsored, low-interest building loans; Buch believes that the measures adopted by the Berlin Housing Alliance are not sufficient to close the supply gap. This affects all generations, but above all the promise of advancement to the young generation to be able to purchase home ownership. In the meantime, property owners could be happy about the recently stable ratings and the positive long-term market prospects, according to the general sentiment.

Commentary by Frank Wojtalewicz

Many – even the largest – players in the German housing market have massively scaled back or completely stopped their own construction activity. This is done with loud reference to the increased financing and construction costs while at the same time stopping the automatic, passive increases in the value of residential property, as we have experienced over the past decade. Indeed, the environment for housing construction has become more challenging. There are several challenges, some of which are politicians' own creation and unnecessary. But the idea that building has become impossible is simply wrong. On the contrary, right now it is important to fill the much-discussed gap in supply with new buildings. Investors are faced with an opportunity to actively contribute to alleviating a major social problem and, at the same time, to invest conservatively in building their own wealth. What is needed is foresight, a hands-on attitude and getting the most out of the funding opportunities initiated by the d init government.


Managing Director
d.i.i. Investment GmbH