Real Estate News - December 2022

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December 2022

Most German tenants are satisfied with landlord

Most tenants (82 percent) in Germany are satisfied with what their landlords do for them, according to a representative survey conducted in December. The result of the "Servicemonitor Wohnen 2022" study by the consulting institute Analyse & Konzepte has thus hardly changed in the past five years. The level of dissatisfaction has also remained more or less the same: Around one in five tenants was not satisfied.

Private individual landlords were rated best at 22 percent, followed shortly by municipal housing companies (21 percent) and property management companies (15 percent). Tenant satisfaction with cooperatives fell from 18 percent to eleven percent last year compared with 2020. According to the analysts, the reason lies in the landlords' handling of the pandemic.

Tenants criticize landlords for their ecological and economic sustainability (23 percent each) and for regularly checking apartments for damage and cleanliness (22 percent). Almost two-thirds of tenants would also like more detailed information on consumption and energy costs in their apartments.

Loans for residential construction will decline in the new year

In its "European Bank Lending Forecast," the consulting firm EY expects a sharp decline in lending in 2023. This is expected to affect not only, but also real estate loans. The experts base this assumption on forecasts for the German economy in the new year and on data from the European Central Bank (ECB). In detail, EY assumes that the number of real estate loans in Germany will decline by 0.1 percent in 2023, while it is expected to increase by 0.5 percent in the euro zone. The bottom line is that it will become increasingly difficult to obtain construction financing.

Another problem in the new year according to EY: Many people and companies will no longer be able to service their loans - the analysts cite an increase from 1.2 to 2.3 percent for Germany and from 2.6 to 3.3 percent in the euro zone. A damper is also expected on German economic output. The result is expected to be more insolvencies among German companies.

Increasing acceptance for renewable energy

More and more people in Germany are now in favor of expanding solar and wind energy, as a YouGov survey commissioned by the Renewable Energy Agency showed in December. According to the survey, this also applies to solar parks and wind farms in their own neighborhood. This change of course was triggered by the Ukraine war and the resulting increase in problems with higher energy costs and inflation. In the survey, one in five respondents said they had not previously been a fan of wind energy but had now changed their mind. Eight percent are still not fans of wind power, but realize that in view of the energy crisis there is no way around its expansion.

With regard to the energy crisis, 22 percent of survey participants said they favored the construction of wind turbines because it would make Germany more independent - even if they personally disliked wind turbines. 14 percent of respondents noted that they would prefer renewable energy from nearby than energy from possibly undemocratic countries.

What is remarkable about the results of the survey from the end of 2022 is that more and more Germans are in favor of building new energy plants, especially wind energy - even if this is to happen practically right "on their doorstep". Just under half of the participants were in favor of this. By comparison, the figure was 39 percent a year earlier. In the case of solar parks, acceptance among the population rose from 59 percent in 2021 to 65 percent in 2022.

Residential construction deep in the doldrums

Residential construction in Germany is still at a low level. In nominal terms, there were 14 percent fewer orders in October 2022 compared with the previous year, as figures from the Federal Statistical Office show. According to the agency's figures, the number of orders actually fell by just under 26 percent in real terms compared with 2021. This trend is unlikely to change in the near future: Just under 14 percent fewer building permits were issued, specifically for rental apartments, according to the Federal Statistical Office.

According to Felix Pakleppa, General Manager of the German Construction Industry Federation (ZDB), this development is linked to inflation and high interest costs. He said there was a lack of willingness to invest in residential construction. He says he is pinning his hopes on the German government's gas and electricity price brakes. But more needs to happen to stop the downward trend, Pakleppa adds. Subsidies for new construction and renovation would have to be easier for the construction industry to obtain. Since the requirements for these are not due to be published until March, companies lack planning security.

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