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Real Estate News - August 2022

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01.

September 2022

ACCENTRO market research: What moves real estate buyers and owners on the market

What really matters to real estate buyers and owners was revealed in August by a major ACCENTRO market research survey. A representative number of owners and those who want to become owners answered many exciting questions: What are real estate owners concerned with? What questions are driving them? Is the major challenge of the energy transition the central issue?

Around 60 percent of all real estate owners are currently gathering information on the topic of energy-efficient refurbishment: costs, implementation, as well as value and efficiency increases. Among the 1,000 respondents, energy refurbishment of their own property is thus the defining issue. No miracle in a situation, which is coined by energy shortage, rising energy prices and uncertain perspectives. When it comes to buying real estate in the near future, 15.1 percent of those surveyed are looking for information on interest rates and interest rate trends. Nearly 60 per cent look for information regarding the increase in value of their own property. Slightly more than 30 percent are interested in a way to manage their own real estate portfolio. And almost half (48.8 percent) attach great importance to a real valuation of the property as a relevant basis for their purchase decision.

Cost increases for gas and heating oil

Prices for gas and heating oil continue to rise and there is currently no end in sight. Millions of homeowners are facing drastic increases in costs. The German government has called on Germans to save as much energy as possible. But where is the best place to start? According to Matthias Hartmann, head of Techem, Germany's largest real estate energy service provider, heating costs will be almost 77 percent higher on average compared to the previous year. An example calculation: For a 70-square-meter apartment, heating with gas would cost around 930 euros - an increase of 400 euros year-on-year.

According to Hartmann, it is also sufficient in winter not to heat the apartment or house above 19 degrees Celsius. With every lower degree, consumers can save money: Who heats two degrees less than before, can save twelve per cent with the energy requirement, Hartmann calculates. In addition the expert guesses to the impact airing. Who puts windows durably on tilting, lets 30 per cent of the energy outside, since areas and windows cool down. The non-profit consulting company Co2online is even more specific: In October, residents should ventilate for 12 to 15 minutes, in November for eight to ten minutes and from December to February for four to six minutes. This could save up to 12.5 percent on heating costs.

End of subsidies for gas heating systems

Even apart from the cost increases, there was bad news for owners of gas heating systems in August. On August 14, the government subsidy for new gas heating systems came to an end. That's because a change to the so-called Federal Efficient Buildings Grant (BEG) had gone into effect on July 28. Homeowners who want to install a new gas heating system have been paying the full price themselves since mid-August. Until then, the federal government had covered up to 40 percent of the cost when new gas hybrid systems were installed. It had been expected that gas heating systems would no longer receive financial support in the future. This is because the government wants to amend the Building Energy Act (in German: Gebäudeenergiegesetz, GEG) and stipulate by law that from January 2024, every newly installed heating system should be powered by 65 percent renewable energies. Pure gas heating systems would then no longer be allowed to be installed. However, the subsidy freeze has now come earlier than expected.

Further KfW funding stopped early

In addition, another KfW funding pot has been exhausted earlier than planned. Just six weeks after the Construction Ministry increased funding for age-appropriate home conversions by 75 million, the money was used up. Property owners who need a stair lift, an elevator or a ramp in front of their front door will therefore not be able to submit any new applications for the time being. Private owners could apply for up to 6,250 euros. The money should have been enough for the whole of 2022. However, according to KfW, the number of applications proved too high. Something similar had happened a few months ago, after the Federal Ministry of Economics suddenly stopped funding for KfW-55-houses When a new subsidy was launched in April targeting KfW-40-houses that had been built to stricter energy standards, the one billion euros in funds made available were exhausted after just a few hours.

Prices for residential real estate drop

As demand for residential real estate drops, so do prices - for the first time also for new buildings. This is the conclusion of the latest Europace House Price Index (EPX). According to analysts, the peak may have been passed. In the freehold apartment sector, prices fell by 0.86 percent in July 2022 compared with the previous month to 228.65 index points, as the July data in the Europace House Price Index (EPX) show. Within the previous twelve months, prices had still gone up by 7.93 percent. Purchase prices for new single- and double-family homes also dropped (minus 0.26 percent). The index in this segment declined to 226.28 points - year-on-year growth was still above the ten percent mark at 11.65 percent.

Following new freehold apartments, prices for existing properties fell at the second fastest rate. In this segment, Europace recorded a decline of minus 0.69 percent in July and now lands at 215.63 index points. In the past twelve months, prices for existing homes increased by 8.03 percent. The overall index decreased by 0.6 percent in July compared to the previous month. In the same period last year, prices had risen by 9.19 percent. The overall index stood at 223.52 points in July.

Sources: Handelsblatt, Haufe.de

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