Construction costs are currently skyrocketing

Interest rate hikes have long been necessary (from a German perspective). They are just not implemented because then some (southern) EU countries would have to raise their hands...

The interest rates outside the ECB (at exactly 0.0% for 6 years) hardly move, agreed. But the mortgage market rates in the current environment are a different beast: according to Dr. Klein, 10-year loans have risen in the last 12 months from about 0.5% to currently just under 2%. The ECB can do nothing at 0%—it has already used up that ammunition!

You just have to do the math.
With 2.5% interest, 1% reserves, 4% return, something around €13.5/m2 cold rent has to come out.
And if things go badly, you have to charge €16.
And that's in the countryside, not in Hamburg!
If the place doesn't rent out immediately or if construction takes a year longer, then that’s the end of building wealth in real estate.

How all this new living space is supposed to be created remains a mystery to me.

Just compared prices of our oak parquet equity as of 10/2019 and 04/2022. Material price €43 to today €84 - that's crazy already

And if so, the rent must be raised significantly to still achieve a return.

You just have to calculate it.
With 2.5% interest, 1% reserves, 4% return

I have only been waiting for that as a left-wing do-gooder. ;)
There is no fundamental right to returns, they can continue to fall. This results in all unprofitable things being pushed off the market and purchase prices correspondingly falling. Perfect, problems solved. Except, of course, for people who insist on unearned income :cool:

Renting makes less and less sense in Germany. I would definitely not build houses for renting. The costs and risks are incalculable. Especially since the rental law is being tightened significantly and more and more costs are being passed on to the landlords.
Keywords: new heating cost regulation, property tax, and abolition of the allocation to tenants as well as looming contributions to health and pension insurance on landlords' rental income. These are threats from politics to the bad landlords. Landlords now also bear the tenants' CO² costs. I had forgotten that and it has already become reality. Thanks for that!

I myself am a landlord of 10 apartments. But it's not really fun. Fortunately, I have already paid off the rental building, otherwise it would no longer be worthwhile for me.

However, I still rent very socially for 5 euros per sqm. That cannot remain like this. I am simply forced to raise the rents.
If the state shirks its social responsibility, I have to do it too.

If you have to charge 16 euros rent for a new building in order to operate cost-neutrally, then there are investment options with less stress.
You have to charge 800 euros cold rent for a 2-room apartment with 50 sqm. Ancillary costs quickly add another 400 euros in today's times. 1200 euros rent is a lot of money. For 100 sqm, that is already 2400 euros. Madness.

And they still want to introduce a nationwide rent cap. That is no longer feasible.

So inflation is something good for you? If your money loses value every day? That's why people invest their money. And since there are not unlimited building plots and living space, selling real estate would only make the market cheaper in the short term.