Living - Building society boss: Real estate prices are socially explosive
Rising real estate prices, according to the CEO of Bausparkasse Schwaebisch Hall, have the potential "for a massive social explosion." Eighty percent of people want to live in their own homes. This is true for the younger generation of 20- to 30-year-olds as well," said the chairman of the board, Mike Kammann, to the "Suedwesten Press" (Ulm/Saturday). "A dream is shattered. This disillusionment of the people." He suspects that politics will try to treat the symptom with laws, for example, a rent price cap, instead of addressing it at the root.
Approximately 700,000 housing units were completed in Germany after reunification, said Kammann. There was an oversupply, and prices fell. "Now it's about utilizing all capacities. We have enough potential," he said. "But given the current situation, we will have to live with an housing shortage plus rent price increases in the next ten years. This cannot be stopped if no proactive action is taken now."
However, he does not expect any impulses from the upcoming Bundestag election in the next twelve months.
Energy renovations are a stressor, time-consuming, and costly factor
In response to the question of missing investments by millions of households in energy renovation, the CEO of the Bausparkasse said: "Our customers usually do not think ideologically. The point 'doing something good for the environment' has priority in politics but lands on third place for private customers." They first ask themselves if the investment pays off – in two directions: "Can I save heating costs?" or "Will my house be more valuable if I ever sell it?" If the investments only pay off after ten years, property owners will not be active. "Additionally, the funding conditions change regularly and are not reliable."
The renovation of old buildings is a stressor, time-consuming, and costly factor – sometimes not even calculable. "The invoice only comes due when targeted funding programs are usable, which the buyer can rely on," said Kammann. "This was rather the exception than the rule in the past, and the financing is already wobbling."
- Despite the chairman's life dream of owning a home, the soaring real estate prices in Germany, as highlighted by Mike Kammann from Swabian Hall building society, could lead to a significant societal upheaval.
- Kammann expressed his concern that politics might respond to the issue of escalating real estate prices by implementing temporary solutions, such as rent control, instead of addressing the problem's underlying causes.
- In the aftermath of Germany's reunification, there was an oversupply of housing, resulting in reduced prices due to the completion of approximately 700,000 units.
- Undeterred by the current housing shortage and rising rent prices, Kammann emphasized the need for maximizing construction capabilities to meet future demand.
- In light of the potential impact on their finances, private homeowners prioritize short-term returns on investments in energy renovations rather than environmental considerations, according to the CEO of Swabian Hall building society.
- The complexity of funding conditions for energy renovations, coupled with frequent changes, creates uncertainty, making it challenging for property owners to justify long-term investments to improve their homes' value and reduce energy consumption.
