2023-09-25 05:51:10
The company Project Immobilien, which managed the construction, went bankrupt this summer, hit by the real estate crisis which has shaken Germany for several months, leaving hundreds of buyers in uncertainty.
Soaring interest rates which increase the cost of credit, plummeting demand, explosion in the price of materials… Business bankruptcies have doubled over one year in the construction sector in Germany, bringing a number of construction sites to a grinding halt. .
Chancellor Olaf Scholz invites industry professionals to a summit in Berlin on Monday. Objective: to relaunch construction, while the country is seriously lacking in housing.
-250.000 euros-
For years, the sector has benefited from the low interest rates enabled by the generous monetary policy of the European Central Bank. Demand was strong, construction sites in major German cities multiplied. But the ECB had to drastically raise its rates to combat inflation, causing the demand for credit, the prices of goods for sale and the profitability of projects to plunge.
The market is slowing down across Europe. However, Germany is particularly affected, with a fall in property prices over one year of 6.8% in the first quarter of 2023, compared to a slight increase of 0.4% for the entire euro zone.
At the same time, developers are suffering from the rising cost of construction materials, resulting from the coronavirus pandemic and amplified by the war in Ukraine.
The German developer Vonovia, a heavyweight in the sector, recently decided to freeze the construction of 60,000 housing units. One in five real estate companies said they had canceled construction projects in August, while 11.9% of them are facing financing difficulties, according to a recent survey by the IFO institute.
In Berlin, the buyers of the Project Immobilien building, in the central district of Prenzlauer Berg, had all already paid half of their property.
“I am not rich. My money is the fruit of my work, and I pay the interest on a loan from which I do not even benefit,” laments Mr. Shevchenko, who declares having paid 250,000 euros.
No insurance has been taken out, neither by the company nor by the future owners. The only hope: find a buyer to finish the project, or finish it themselves.
“I might never have thought that something like this might happen in Germany,” explains, with tears in her eyes, Marina Prakharchuk, 39, who has already paid 175,000 euros for a 45 m2 apartment in this building. “I put all my savings into it,” adds this employee of a logistics company, originally from Belarus.
Social bombs
This crisis is a hard blow for the government of Olaf Scholz, who had promised, when he came to power at the end of 2021, to build 400,000 homes per year. We are far from it: the sector expects to painfully reach the figure of 250,000 this year, and even to drop below 200,000 in 2024.
However, the needs are enormous, exacerbated by the reception in recent years of numerous refugees and foreign workers, in a country lacking in labor.
A situation which might turn into a social bomb, at a time when the lack of supply causes a sharp increase in rents. In Germany, half of the population does not own their home. Enough to further undermine the purchasing power of households, already shaken by inflation, which still exceeds 6% in the country.
The Minister of Housing, Klara Geywitz, announced that she wanted to extend certain assistance measures for access to property for families, and invest “an additional billion euros” in residences for students and apprentices.
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