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Real Estate News - January 2024

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31.

January 2024

End of the funding freeze: serial refurbishment is subsidized again

Good news for property owners who want to renovate: The Serial Refurbishment funding program, which was initially halted at the end of 2023 due to the budget freeze, will be resumed. This means that it is once again possible to receive state funding for energy efficiency advice.

The background: Following the budget ruling at the end of 2023, the Federal Constitutional Court had to suspend several funding programs as they were financed from the Climate and Transformation Fund (KTF). The Federal Ministry for Economic Affairs and Climate Protection (BMWK) has now announced that these programs will be restarted.

Prior to this, the Federal Government had to examine the effects of the ruling by the Federal Constitutional Court on November 15, 2023, according to the Federal Office of Economics and Export.

The first amendment to the BEG, which has regulated the energy-efficient refurbishment and new construction of buildings as well as the use of renewable energies for heat generation since 2021, came into force on January 1, 2023. As part of the reform, a bonus of 15 percentage points was also introduced for serial refurbishment.

Sustainability Report: Investors and users value sustainability

The topic of sustainability is becoming increasingly important for buyers and users of real estate. The "Sustainability Report 2023" from the professional association RICS (The Royal Institution of Chartered Surveyors) shows that the demand for sustainable buildings has increased worldwide in 2023. Around 4,000 global real estate experts were surveyed for the report.

The results illustrate how relevant the energy balance of a property is for its valuation: According to the report, 53.5 percent of respondents in Germany noted a slight increase in demand from tenants for green and sustainable properties, with 31 percent of respondents even observing a significant increase. According to the report, a similar trend can be observed in investments: 53.5% of experts reported that there was a slight increase in demand for green or sustainable real estate investments in Germany and 31% reported significant growth. Overall, the figure for Germany in the "RICS Sustainability Report 2023" was 84.5% (2022: 87% - slight increase 38%, significant increase 49%).

Influence on the capital value

The experts found that the sustainability of a building also has a significant impact on rents and capital values. Around 27% of respondents in Europe believe that green features have a significant impact on the capital value of a property and around 16% of respondents stated that green features of a building have a significant impact on the rental price.

They cited energy efficiency, the reduction of energy consumption and the use of fossil fuels as the most important features for evaluating a property - around one in three survey participants (30 percent) worldwide believed that this is a key feature for investors and more than one in four (28 percent) observed that these factors are also important to users when choosing a property.

Consequently, investors also attach importance to green building certification when buying a property: around 30 percent of experts worldwide stated that green building certification is an important feature for real estate investors and around one fifth of respondents were of the opinion that users also pay attention to these certificates.

Many of the real estate experts surveyed seem to want more uniform, internationally valid standards for green building certifications: A third of respondents cited the lack of common standards and definitions for green buildings in the UK and Europe as a hurdle. They consider binding standards for energy performance to be an important means of achieving the goals of the European Union (EU) Green Deal.

New deadlines for landlords: Heating systems must be optimized and checked

Owners of apartment buildings with more than six apartments must have their gas central heating system checked and, in the event of defects, optimized by 30 September 2024. If hydraulic balancing has not yet been carried out, this must be done by this date. The obligation is based on the Ordinance on the Safeguarding of

energy supply through medium-term measures (EnSimiMaV). The regulations will apply from January to September 2024 in parallel to the requirements of the Building Energy Act (GEG), which came into force at the beginning of the year.

In large apartment buildings with ten or more residential units, the deadline was September 15, 2023. There are no regulations in this regard for smaller apartment buildings and detached and semi-detached houses.

Federal budget 2024 adopted - more money for housing construction

Politicians want to create new ways to combat the acute housing shortage in Germany. To this end, the draft federal budget for 2024 includes a funding program for the construction of small and affordable apartments amounting to one billion euros.

The draft budget will now be discussed in parliament, with the Bundestag and Bundesrat due to decide on it at the beginning of February. As part of the "Climate-friendly new construction in the low-price segment - residential buildings with small to medium-sized units" funding program, the construction of affordable apartments with less living space that meet at least the EH40 standard is to be simplified in the form of an interest rate reduction.

It took weeks for the budget committee in the Bundestag to approve the 2024 budget on January 18, with expenditure of 476.8 billion euros and new loans of around 39 billion euros.

According to a statement from the ministry, the program is to be established as a third pillar for promoting new construction alongside the KfW program for climate-friendly new construction (KFN), the "Home Ownership for Families" (WEF) loan promotion program and social housing promotion and is to take effect in the short term until 2024 and 2025. Rents are to be in the lower third of the rent index. According to a working paper, ten million is planned for 2024 and the remaining sum is to be stretched over the next few years until 2034 as commitment funding.

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