In May, the European Central Bank (ECB) raised the key interest rate once again - in this seventh step by 0.25 percentage points to 3.75 percent. As in the past, the current increase is aimed at combating inflation in the euro zone. The key interest rate regulates the rates at which banks can obtain new money from the central bank. Private customers who now need a new loan or follow-up financing, for example for a real estate purchase, will also feel the impact of higher interest rates. Loans that are already in place are not usually affected.
Financing a property will thus become more expensive in the long term. Although interest rates had recently fallen slightly, the comparison portal Check24 assumes that interest rates of up to four percent - or even more - can soon be expected again for a ten-year construction financing. With such a term, even small increases can mean thousands of euros in additional costs for private builders.
An example calculation from Check24 illustrates this: assuming a loan of 400,000 euros at an average interest rate of 3.31 percent per year, a borrower would incur 117,982 euros in interest costs by the end of the term. This would mean a monthly installment of 1,770 euros. If interest rates were to rise to 4.5 percent, this would result in additional costs of 41,593 euros. The monthly installment would be 397 euros higher.
It can be assumed that further interest rate steps will follow. The ECB wants to achieve an inflation rate of two percent in the euro zone in the medium term and thus keep prices stable. There is still a long way to go until then: According to data from the Federal Statistical Office, the inflation rate in Germany was 7.2 percent in April 2023. Inflation is being driven primarily by high energy and food prices. Experts believe that it will not become clear until the end of the year how much further interest rates will rise.
Berlin has proven to be extremely resilient to climate risks in a global comparison - this is the result of the Climate Resilient Cities Index. The German capital owes its good rating to its high proportion of sustainability-certified buildings. The real estate markets of the metropolises Toronto, Paris and Madrid were also rated top in terms of climate resilience. The British real estate services company Savills analyzed a total of 23 cities for this study. Important criteria included location, how many sustainable properties a city can boast, and how resolutely politicians are taking action against climate change.
A large part of the factors depend on the location and can hardly be influenced by the cities themselves, say the analysts from Savills World Research. Nevertheless, planning, building practices and infrastructure can help strengthen the resilience of local real estate. For example, stormwater drains could be built to reduce the risk of flooding.
Berlin therefore also owes its good ranking to its geographical location, which means that the German capital is exposed to comparatively few risks from the consequences of climate change. The high proportion of sustainably certified properties also plays its part: According to Savills, Berlin has the second-highest share of certified properties of all 23 cities surveyed, at 1.5 percent - only New York beat this figure, at 1.8 percent. But even in these top locations, there is still room for improvement: According to Savills, even in the cities now rated among the best, much still needs to be done to raise the sustainability standard of all properties across the board.
Yet Berlin is not entirely spared challenges related to climate change - such as drought and heat, as well as more severe storms. A large part of the population is in favor of doing more to mitigate climate risks. That's why the capital is setting a good example: the concept of a floating city is being implemented at Berlin's former Tegel Airport. The projects, called "Urban Tech Republic" and "Schumacher Quartier," are designed to absorb large quantities of rainwater, store it and release it again when needed.
German households are to be equipped with intelligent electricity meters - so-called smart meters - as quickly and efficiently as possible. The law, which is intended to drive forward the digitization of the energy transition with the mandatory installation of such devices, has now been approved by the Bundesrat. The digital meters are intended to give German households a better overview of their electricity consumption and thus enable them to regulate it more effectively. At the same time, the electricity grid is to be relieved. However, these digital meters are not to cost more than 20 euros per year.
The law that has now been passed stipulates that the nationwide installation of smart meters is to be completed by 2030. This task falls to the metering point operators. The obligation to install them will apply from 2025 to households with an annual consumption of more than 6,000 kilowatt hours or a solar power system with an output of more than seven kilowatts. Those who consume less electricity per year still have the right to receive such a digital electricity meter.
With the new law, the annual costs are limited to a maximum of 20 euros for private households. For those who use a heat pump, the amount is 50 euros a year. All electricity customers jointly pay the costs for network charges. Suppliers will also be obliged to offer flexible electricity tariffs from 2025.
The new law also streamlines bureaucracy. For example, the installation of smart meters no longer has to be approved by the German Federal Office for Information Security (BSI). This is because the manufacturers of these devices now easily meet the high data protection requirements. It is also no longer necessary to have each development stage certified by three independent manufacturers.