Construction costs are currently skyrocketing

1.12 million more people in 2022, but only just under 80k more in 2021. You cannot simply assume +1.5 million more population. People also move away, die, are born.

The construction of an apartment in a multi-family house today costs around 300,000 euros. To build cost-neutrally here, a net cold rent of 18 euros must be achieved. So far, housing companies calculated with costs of 230,000 euros and then 11 euros NKM. The problem is, no one can pay these 18 euros cold rent per sqm anymore. So no new construction is planned at current prices anymore.

How did you calculate the numbers? Oh right, they are just quoted from the press ==> then please say so as well. I can tell you that the 18€/sqm cold rent is nonsense. But it is correct that affordable housing is not possible with the current construction costs – at best in the middle of nowhere with cheap land.

How about requiring the construction of one or more granny flats when building a single-family house and renting them out? As part of the building permit, of course. Naturally combined with subsidies and tax components.

That will ultimately suppress the demand for single-family houses. Living alone is a major reason for building. About 2/3 of all new apartments in Germany are single-family houses (meaning: one apartment in the house).

There are many ways to create living space. Today one person has about 37% more living space than 30 years ago ==> build smaller apartments, they are not that expensive. But tenants don’t want that either.
Abolish VAT on construction services. Makes building directly affordable without much effort. But the state does not want that (housing companies have been demanding it for years).
Abolish real estate transfer tax? Interesting for single-family/two-family houses. For multi-family houses this position does not make much difference in the total investment costs. Can be neglected.

I got the numbers from a housing economist who said it in an interview on DLF. Somewhere shortly after half past one. You can certainly find the piece in the DLF media library.

With ever new requirements such as the extended heating cost billing, legionella tests, smoke detectors, radio reading devices, smart meters, energy performance certificates, documentation obligations, the upcoming cost cap for heating renovations at only 50 cents per square meter, and who knows what else, the indirect costs are driven up so much that new construction or expansion simply no longer makes sense for many landlords.

I cannot and do not want to burden the tenant with ever-increasing costs, and I cannot pass on everything. Because in the end, I am the landlord who has to present a single 85-year-old retiree with a 1200 euro additional service charge bill, not Mr. Habeck. Because then I have to tell her she does not need to pay it before she has to resort to collecting bottles.

But even for something like that, a German tax office has no understanding.

The state should consider carefully whether and how it increases landlords’ motivation or whether it completely drives the cart into the wall with ever new restrictions. Not everyone living here has as much goodwill and patience as the German citizen who has been living here longer. A look at the neighboring country is enough to see how quickly it can become very uncomfortable here, too.

Building a granny flat does not significantly change the construction cost per sqm of living space. We have been taking this misconception out of builders’ heads for years, especially those whose mom and dad invest 80,000€ equity while at the same time wanting to occupy 80 sqm of new construction on the ground floor. The math doesn’t add up.

Edit: Just retrieve the data from [destatis] and similar sources. I’m not going to sit through an interview now, no ;-)

The elimination of the property transfer tax only helps to a limited extent against the shortage of housing. It does not create a single additional apartment. The only possible effect could be that people are more inclined to downsize again in old age if the transaction costs are not so high. However, these are neither the only transaction costs nor are transaction costs the only obstacle. Even tenants rarely downsize in old age. And I can’t hear about the average apartment size anymore. Broken down by demographics, it shows that the largest living space is used by older people, especially older people living alone. You can guess three times which group has grown the most in recent years.

The discussion here is primarily about whether new housing is being built or not - all good, it is an important topic.

What is also an issue for me here are the vacant apartments. And there are really many - and the reasons are diverse: Of course, it is simply an adjustment when suddenly a stranger walks through the staircase - even if it is well separated. I hear here "oh, I always leave my apartment door open, then I would have to close it." Another reason is vague to irrational "then the apartment would have to be heated, which costs again," so the heating is turned off completely and the apartment is left empty. In one case, I was even personally involved; it was an inheritance community that struggled for months between "We need a new heating system" and "Passing that on to the tenants is gentrification" and "it never pays off," etc. The new heating law also does not exactly make landlords eager to install a new heating system. That takes away planning security and then a year is spent on discussions.

So yes, the people who no longer want to build rental apartments (for whatever reasons, even if just "to save taxes"), this will eventually show up in the statistics of the ever-decreasing rates of new housing construction.

What you don’t see, and what is at least here a massive problem, are the apartments that simply are no longer rented out.