Regarding the decision made by the Ampel coalition this week, Axel Gedaschko, President of the Federal Association of German Housing and Real Estate Companies (GdW), mentioned to “Bild”, “What the Ampel has decided for the construction is a guarantee for significant rent increases, a program for less new construction, and a setback for the heat pump.”
Construction Expert Warns of Rising Rents
Following the Ampel decisions, the heating replacement funding for landlords is being reduced. Gedaschko stated, “Tenants with low incomes will be the ones affected,” and added that landlords would pass on at least a portion of the costs to their tenants. He also mentioned to “Bild”, “Tenants can expect that, on average, an additional €3000 per apartment will be added to the rent in case of a heating replacement in a multi-family house.”
In addition, the federal government has temporarily halted its funding program for environmentally friendly new buildings. However, Germany is facing a shortage of housing. The Ampel coalition had set a target of implementing 400,000 new homes per year. In 2023, it is estimated that only 250,000 new housing units were created. The housing shortage continues to cause tension and high rents. This is further exacerbated by increasing electricity prices due to the abolition of network charge subsidies. Gedaschko stated that the Ampel is making the installation of heat pumps less attractive.
Housing Scarcity Growing in Germany
Following the suspension of funding for environmentally friendly new buildings, the construction industry is warning of a worsening of the tense situation. Peter Hübner, President of the Federal Association of the German Construction Industry, mentioned that it is already a reality that every second company in housing construction is suffering from a lack of orders and housing scarcity in Germany is growing week by week.
“Nothing harms an investment industry like the construction industry more than unclear or constantly changing conditions,” highlighted Felix Pakleppa, the Managing Director of the Central Association of the German Construction Industry.
The Federal Association of Independent Real Estate and Housing Companies (BFW) stated that the construction industry has been demanding support in the crisis for over a year. However, there is no sign of reliability and planning security. BFW President Dirk Salewski said, “The loss of confidence in politics could not be greater.”
