Federal investments are only slowly relaxing the housing market

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Under the hashtag "rent madness" there are demonstrations in many German cities on Saturday. The largest demo is expected in Berlin. It’s about the rents in the metropolitan areas, because they have been increasing recently. Politicians are trying to take countermeasures, albeit with limited success. The child benefit supports housing construction in the wrong places and measures for social housing are taking effect only slowly.

by Alex Krämer, ARD Capital Studio for MDR AKTUELL

One and a half million new apartments in Germany. That is the declared goal in the coalition agreement. Because SPD and Union have noticed that there is pressure in the boiler. SPD leader Nahles finds the topic of rental prices extremely important. She calls it "The new social question in Germany." Construction Minister Seehofer from the CSU also insists on the weight of the topic:

For me, the question of how our rents develop is the social problem today.

Horst Seehofer Interior and Construction Minister

Child benefit supports building houses in the country

So far, Seehofer has not set great accents – he is significantly more interior minister than construction minister. And most of the money in the construction sector, 10 billion euros, is spent by the grand coalition in a favorite project of the Union, to which a wide variety of experts attest extensive ineffectiveness: in child benefit.

The program opens families the door to their own four walls, Seehofer advertises. Families who build or buy receive 1,200 euros per child per year for ten years. But firstly, there is also the money to buy existing apartments. According to the first figures, almost 90 percent of the recipients even buy houses and apartments that already exist – more apartments are not created this way.

Secondly, the subsidy is negligible given the high prices in the metropolitan areas. Where, on the other hand, the building land is cheap, that is, in the country, new houses could certainly be built through the construction child allowance. Unfortunately, of all places where a lot of living space is already empty today, says Ralph Henger from the Cologne Institute for Economic Research. And that is expensive for taxpayers, the economic researcher emphasizes.

Ultimately, it results in too much building in wrong locations. We are building tomorrow’s vacancy in rural areas. And then we’ll be in three, four, five Years we find not correct have promoted.

Ralph Henger Institute of German Economy Cologne

Federal policy has only limited influence

In addition to more property, the grand coalition also wants to boost the construction of rental apartments – there are new depreciation options for this. The promotion of social housing continues at a high level – around 2 billion euros are invested each year. In addition, the rent brake is tightened, rent increases for modernization are capped.

So it’s not true that nothing happens. However, the influence of federal politics is limited. There is a lack of building land. The municipalities would have to provide this, but they often have to fight resistance from local residents. Because demand is high, construction companies can charge high prices – which makes it difficult even for urban housing associations to build cheaply. And in general: planning and building – it all takes years. Even if the steering wheel is pulled around, the ship only gradually moves in a different direction.

Significantly more housing construction in 2018

But there are first signs that something is changing. The number of newly built apartments has increased significantly, from 160,000 in 2010 to around 300,000 in 2018. And a study from this week shows that the gap between the apartments actually needed and those actually built has narrowed significantly. That means that the rise in rents is unlikely to continue unabated. However, it is not to be expected that they will sink again, at least in the popular big cities.

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MDR CURRENT RADIO | April 06, 2019 | 07:08 a.m.

Last updated: 06. April 2019, 5 a.m.

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8 comments

04/08/2019 08:16 Ichich 8

". there are no more apartments. " Something seems to be misunderstood: The child benefit is only available for so-called owner-occupiers. So if existing apartments are bought, a need is covered and the family "disappears" as a customer. The same applies to buyers "wrong locations".

April 6, 2019 5:00 pm Snowman – dear "right" as for sale 7

"That means that the rise in rents is unlikely to continue unabated. However, it is not to be expected that they will sink again, at least in the popular big cities."

With this Orwellian gibberish we should be made clear, it goes on as before. Presumably, probably to be expected.

"And a study from this week shows:"

Which study please, who when and where, source. simplest journalistic craft. Deliver facts. Oh, I forgot where I am here.

06.04.2019 10:32 optinator 6

The federal government is investing? The bottom line is that it is the taxpayer who will also checkout here.

06.04.2019 10:15 pkeszler 5

Child benefit is a favorite project of the CSU.
Almost 90% of children’s construction allowance is invested in existing apartments by buyers. This does not increase the number of houses or condominiums.

04/06/2019 10:09 AM Thinking Citizen 4

Everyone seems to have escaped the fact that the current rental price development is a result of supply and demand – a basic rule of the market economy.
Suddenly everyone wants better socialism!
And the state should fix it .

Apr 6, 2019 9:04 AM Atheist for lack of evidence 3

40, 45, 50
are not the new model dimensions but the energy efficiency of a new family home.
Whoever obtains a catalog from a prefabricated house provider gets bee advertising, sustainability, bio-heating.
A building permit is only issued if min. an expensive eco-system is planned.
Funding is only granted to families who want to build if they can prove 40, 45 energy efficiency.
Accordingly, new houses are vacuum packed, which in turn makes an expensive ventilation system unavoidable.
The EU requirements to reduce CO2 make building impossible for normal incomes.
No child benefit will help either.

04/06/2019 08:09 pkeszler 2

Seehofer: "For me, the question of how our rents develop is the social problem today."
But whether child support is the solution to the problem? For a condominium or your own house, you also need a good income with which you can build up the necessary equity and pay off a real estate loan. Young people with young children usually cannot.

06.04.2019 06:30 wwdd 1

People are the cause and solution of the problem. As long as the youth are drawn to the cool and hip cities, the prices will rise there. Her parents’ homes in the country will be difficult to sell or even demolished. And then you don’t just stand for a demonstration for the climate, but for affordable housing. But even there, you have to be able to afford it. In any case, the state does not judge it.

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