EU Council decision: Buildings sector to be climate-neutral by 2050

At the end of October, the EU Council agreed to revise the Energy Performance of Buildings Directive. The result: by 2030 at the latest, all new properties are to be climate-neutral, and existing buildings are to become zero-emission buildings by 2050. Before these changes can be implemented, however, the Council must first negotiate them with the EU Parliament. In detail, the EU Council's new plans call for newly constructed public buildings to be climate neutral from 2028 and all buildings from 2030. Historical buildings, among others, are to be exempt from this. Existing buildings are to become more energy efficient above all. The EU commissions had called for stricter regulations, including a refurbishment obligation for old buildings.

How Berlin's northwest can develop as an urban quarter

Real estate consultant CBRE sees a lot of potential in the northwest of Berlin in the launch of its "Future Cities" study series. The area has long lagged behind its potential, not least because of the now-closed Berlin-Tegel Airport, in whose approach corridor the area was located. In its series of studies, CBRE will in future examine the investment potential in specific neighborhoods in German metropolitan areas.

According to CBRE, there has been a lot of investment in Berlin's northwest over the past ten years, with the investment volume in 2021 amounting to almost 950 million euros. Among other things, the report cites infrastructure as a deficit for the urban quarter. According to the report, the main areas that need to be improved are public transport links, the attractiveness of the area as a residential location and the integration of the site into Berlin's innovation system. There is also a lack of suitable office and commercial space in Berlin's northwest. This urgently needs to change so that more companies can settle there and the area can reveal its full potential.

European Central Bank raises key interest rate to two percent

In an effort to combat inflation in the eurozone, the European Central Bank (ECB) raised its key interest rate from 1.25 to 2.0 percent in October. This is already the third increase this year. The key interest rate determines the conditions at which banks can borrow fresh money directly from the ECB. The move was not unexpected, but in addition to construction projects in the real estate sector, it also hits private builders hard. Among other things, real estate loans will thus become more expensive once again.

The goal of the ECB's Governing Council: more expensive loans are intended to reduce demand and curb inflation. According to ECB President Christine Lagarde, further interest rate hikes are likely. The first interest rate hike in eleven years took place in mid-July this year, the second in early September.

KfW still subsidizes new buildings with 160 million euros

160 million euros are still left in the funding pot of the EH40 sustainability program of the Kreditanstalt für Wiederaufbau (["KfW"] Reconstruction Loan Corporation) for 2022. Anyone wishing to receive funds from this program can still apply until the end of the year, but must aim for the high "EH40" energy efficiency standard for their new building. Compared with a reference building, such an efficiency house consumes only 40 percent of the primary energy and the transmission heat loss must be 55 percent of the reference building, according to KfW data.

The program comprises a volume of 500 million euros and has been running since the end of April 2022. Since then, more than 1,100 applications for funding from the KfW pot have been approved, according to the Ministry of Economics. Next year, a completely new funding program is to be launched, but with even stricter requirements for the energy efficiency and CO2 emissions of the subsidized buildings.

In January 2022, an abrupt halt to the acceptance of KfW grants for energy-efficient construction and refurbishment had caused chaos in the construction industry. Numerous investors and project developers had firmly calculated on the subsidy amounts. The reason for the sudden announcement: An unmanageable flood of applications according to the Ministry of Economics. After the program was restarted in April, it had to be stopped again a few hours later. The newly available funding of one billion euros had been exhausted in record time.