I'm curious to see what happens to property prices and rents when building becomes more and more expensive.
When discussing CO², we often like to talk about "tipping points" – here we are heading towards one or have probably already reached one.
As a serious investment object, new construction is no longer worthwhile. The necessary rents cannot be achieved, and the profits of households from the boom are now being eroded by inflation and scarcity. Due to the cash bans, Germany is also beginning to lose its role as a black money real estate haven at least somewhat. Shortly after Corona, it became clear that transactions were fewer, the respective sums higher, and the buyers mostly private (single-family houses, condominiums).
The shortage of listings from brokers indicates a drying up of the market, the asking prices are completely driven by panic. Interest rates are currently rising, and the danger of a real estate bubble is being discussed everywhere. Here too, we read that the banks no longer support the fantasy prices. With cost increases of over 10%, equity must be at least €50,000–80,000 or more higher than last year for such a project in the €600,000–750,000 range to be feasible at all. No one just saves that away – and the alternatives to mathematically cheaper rents are there. It started in Hamburg last year, and this year other large metropolitan regions followed.
So it will be exciting. Especially regarding the ruins that rot unoccupied as investments. If next year the solar roof has to be installed, things will get lively.. ;)