On April 1, the German Federal Financial Supervisory Authority (BaFin) introduced a new capital buffer for residential real estate loans. Borrowers tend to face higher costs for their loans as a result, in addition to the already increased interest rates. The goal is to act preventively as long as financial stability prevails, BaFin head Mark Branson said. Until the measure takes full effect, credit institutions still have time until February 2023 to build up appropriate reserves. After that, banks are obliged to deposit two percent of a residential real estate loan as collateral from their equity capital.
Negative reactions from the banking industry in view of the restriction of their flexibility followed immediately. Responses from the real estate industry also refer to the still existing shortage of real estate, which could be exacerbated by such measures. For example, the president of the Central Real Estate Committee, Dr. Andreas Mattner, warned: "Such measures have a counterproductive effect and take us a big step away from the German government's self-declared goal of building 400,000 new homes a year."
Real estate broker Realogis expects that there will be a shortage of logistics space with more than 5,000 square meters in Berlin from mid-2022. This shortage is expected to last twelve to 18 months. Whereas electric carmaker Tesla had opened a Gigafactory with around 327,000 square meters in the first quarter of 2022, the rest of the market remained inconspicuous. With 154,200 square feet traded, traded space fell 0.5 percent year-over-year. Excluding Tesla, 31 deals were completed - a drop of 12 compared to last year. A shortage is emerging; available deals are dwindling due to immediate purchases when available. These developments led to an increase in rents for logistics space. An average of 6.50 euros per square meter is now being paid, an increase of 10.2 percent over the previous year.
According to credit broker Interhyp, interest rates for ten-year real estate loans were still at around one percent in January and 1.6 percent at the beginning of March, but rose by just under 0.5 percent during the same month. This is the first time that construction interest rates have returned to the level seen at the beginning of 2015. In addition, Interhyp estimates that interest rates will continue to rise over the course of the year. Values of 2.5 to 3.0 percent are realistic, according to Mirjam Mohr, Member of the Board of Management of Interhyp AG's Direct Channel.
Following the discontinuation of the KfW-55 subsidy for energy-saving buildings in January, the Federal Ministry of Economics announced on April 5 that it would provide a new subsidy for houses. However, the conditions became more strict: funding was still to be provided only for houses with a 40 percent reduction in energy consumption compared with reference houses. One billion euros was made available for this purpose. From April 20, new applications could then be submitted - for a whole three hours. After that, the funding for energy-efficient new buildings was already completely exhausted due to very high demand, making it impossible for KfW Bank to accept any new applications.