Construction costs are currently skyrocketing

Not everyone can renovate. There are also homeowners – especially in rural areas – who would have more money to live on in the social hammock. When you have to turn every cent twice and sometimes there is still a lot left at the end of the month, when the money is gone, you have to save for years to eventually be able to buy the material for insulation. Should these people go into the social hammock, move to cities because there are theoretically rental apartments there? They have never flown for that, do not eat meat daily, mend clothes, buy second-hand.

Now take it easy. We have been talking for at least 10 years about the need to energetically renovate the existing building stock. And apart from the last 1.5 years, inflation was always low. So low, in fact, that the ECB no longer knew how to increase it. Until a few years ago, construction costs were also significantly lower, with low interest rates. Those who acted proactively were able to renovate and now experience faster amortization. But just as politics approached the issue half-heartedly (no comprehensive renovation obligations), the vast majority of homeowners postponed the issue to the future. Energy was relatively cheap, and a renovation would not pay off. Now we have the mess because the pressure to renovate is rising at a time when construction prices and interest rates are also high. And, typically, people are now acting pro-cyclically by trying to suppress the issue with subsidies.

And what would be your suggestion on what we could do NOW? What we have missed we can no longer change.

But just as politics has half-heartedly addressed the issue (no comprehensive renovation obligations), the vast majority of homeowners have postponed the issue to the future. Energy was also relatively cheap, and a renovation would not pay off. Now we have a mess because the pressure to renovate is rising at a time when construction prices and interest rates are also high.

I fully agree with you. Due to low energy costs in the past and the then laughable subsidies for existing building renovations but high subsidies in new construction, no incentives for renovation were created. These only came recently with the BEHG surcharge on natural gas and oil / gasoline and the introduction of BEG funding. Unfortunately, it was already too late then, as many people had no money left due to economic policy. Now we also have the increased construction and energy costs, and even fewer people have room to invest.

That inflation can only be influenced very limitedly by the central bank's monetary policy no longer needs to be proven at the latest since this year, and even before it was evident that low interest rates cause a capital flow towards stocks and real estate, but the influence of real wage development (and other factors) on inflation is much greater – and the latter was exactly zero from 1990 until a few years ago.

For example, in our case, we bought existing buildings in 2017 with limited funds and could initially only do the bare minimum. For 5 years, we have been proceeding little by little, as money is available. In 2023, the ground floor renovation with floor insulation will happen, and this is how we are moving forward – in 2022, the last new windows were installed, for example. I expect that it will take us about 5-10 more years (financially speaking) until the house has been completely overhauled once, including enhanced external insulation. We didn’t have to go into excessive debt for this; for us, this approach was exactly right. However, we are not big energy wasters; we have low consumption in a small house. And we also live quite energy-consciously in other respects. Low waste (unpackaged and so on), bicycle, public transport, and what you’re generally familiar with.

A new build also releases a huge amount of emissions into the air, precisely because everything has to be manufactured. No one here can exempt themselves from this "debt." However, I agree if people criticize those living in huge old houses who clearly had the money but preferred to waste endlessly cheap energy for many years because it was simply so cheap.

This is a bit like the debate about the inheritance tax. Horror scenarios are painted of little people who would fall into poverty through new regulations. And the millionaires and billionaires and real estate companies are laughing their heads off.

Maybe I have my special tunnel vision down here in the south, but I lack sympathy when I know how many apartment buildings some of our clients have inherited in recent years and only extract the maximum income from them. Then I am the fool who has tenants with the leaky 70s aluminum windows on the phone, who rightfully expect to get their 80 sqm for 1800 € (cold) warm warm.

And what would be your suggestion for what we could do NOW? What we have missed we can no longer change.

Scrap watering-can aid and invest the money in low-interest renovation loans. Repayment grants should depend not only on how the renovation is done but also on the owners' assets and income. Serious renovation obligations upon change of ownership. Training offensive for crafts professions. Currently, we are subsidizing energy consumption with debt; we should subsidize energy saving. If everyone is relieved, no one is relieved. Prices will simply continue to rise or fall less far from their peaks. At the same time, take off the blinders in energy supply. A coal phase-out by 2030 is not a likely future if we electrify everything at the same time. Keep nuclear power plants running for the foreseeable future and create a joint repository with Switzerland. It's right below the border anyway. Limit the right to object to infrastructure projects to residents who are actually concretely affected (e.g., within a 5 km radius of wind farms) and compensate these residents from the outset for having other people's infrastructure in their immediate vicinity. Expand the railway so that freight traffic can actually be shifted to rail and not just to roads. Expand bicycle paths. Especially in rural areas, this is a much more effective lever than a bus.