Vonovia is stopping all new construction projects. This is fatal – and not just for the cities affected. Politicians must now act quickly.
It is an iron law on the real estate market: interest rates go up, new construction goes down. When loans become more expensive, fewer people can fulfill their dream of owning their own home. And large companies also have a harder time financing the construction of entire apartment blocks.
This is bad news for Germany, but especially for big cities like Berlin, where many of these apartments are supposed to be built and where sometimes 5,000 people are already jostling for a one-room rental apartment. This will increase the pressure on the market even more: where supply does not keep pace with demand, rents will continue to rise. This is why politicians are now called upon to act.
You can hardly blame Vonovia boss Rolf Buch for stopping new construction. Construction costs have been rising steadily for years, especially in urban areas, because there are too few construction companies and tradesmen who can accept orders.
Last year, Russia’s attack on Ukraine caused prices for building materials to rise – and now construction interest rates are also going through the roof: instead of around 1.1 percent as a year ago, annual interest is now around 3.5 percent.
Buch’s announcement also has great symbolic significance, and other companies will soon follow the example of the industry leader. New construction in large cities is in danger of coming to a complete standstill.
A total of 700,000 apartments are already missing. Just last week, Construction Minister Klara Geywitz (SPD) had to scrap the target of 400,000 new apartments per year for 2022 and 2023.
Politicians must therefore take swift countermeasures. Financial support for new construction for housing companies would be one option. Another, probably better, option would be to reduce the costs that arise from government regulations. The federal and state governments should therefore urgently relax the rules on construction.
Does every ventilation system really have to be regulated down to the last detail? Do the requirements for insulation have to keep increasing? And does every entrance to a residential tower have to be completely barrier-free and equipped with ramps?
Of course, all of that is well and good – if it works. But now it’s no longer possible. We can no longer afford every strict rule. Building in Germany must finally become cheaper. This is the only way to solve the housing crisis.
