Construction costs are currently skyrocketing

My boss continues to refuse an inflation adjustment; instead, there is a 150 euro fuel bonus, which is EXPLICITLY! not an inflation adjustment. He hates automatic salary increases like the devil hates holy water. :rolleyes:

Today we have a budget and remuneration agreement with the health insurance companies. The hospitals are negotiating, among other things, the increase in prices for services where the price is not fixed. What do you think are the arguments from the insurers? We have to maintain the stability of our members' contributions, we can only increase by 2.5% even though the inflation rate is almost twice that, etc. And then the employees come and want an inflation adjustment. It is all understandable, but when you can hardly influence the price yourself, it is difficult to implement... In the construction industry, all prices can be passed on, but unfortunately, this is not possible at all in hospitals.

May I ask what you have? Gas, Gas + solar thermal, heat pump, heat pump + photovoltaics.... ?

Geothermal energy. However, the remaining electricity costs worry us more. In addition, fuel costs and generally increased prices. We are now becoming cautious because of that.

Geothermal energy. However, the remaining electricity costs worry us more. In addition, fuel costs and generally increased prices. We will be cautious now.

With photovoltaics? Maybe it is now worthwhile to make a purchase. Energy costs will only move in one direction :cool:

Simple example: If I take out €1,000k at 3% interest with 5% inflation and sell after one year, then I had to pay €1,030k and can sell for €1,050k, thus making a €20k capital gain.

The example is greatly simplified, but I think the principle is clear.

Mathematically that may be correct. But that implies that everyone can simply take out unlimited credit. Banks naturally see that differently.

Besides: with this way of thinking, companies and individuals regularly go bankrupt. Having assets is one thing, but the cash flow must fit as well. Ask households with lower income levels at the moment if they are happy that inflation is rising faster than the mortgage rates for the construction project they just canceled. I rather doubt it...

Simple example: If I borrow €1,000k at 3% interest with 5% inflation and sell after one year, then I had to pay €1,030k and can sell for €1,050k, so I make a €20k capital gain.

Yes, but for homeownership I generally assume owner-occupiers here.

And if I now (simplified numbers)

have an income of €5,000 and from that
repay €2,000 I have
€3,000 for living expenses plus maintenance and incidental costs.

Now we have 8% inflation and my gross salary increases by, say, 5% and net then by 4% (progression), so my installment does not change, but my new available net is then 5200-2000 = €3,200. In terms of purchasing power, however, I now only have €2,960 for living expenses plus maintenance and incidental costs, i.e. 1% less purchasing power. And so on and so forth. This increases over the years. Renters are even worse off because for them these rates are rarely fixed over decades (depending on the loan term) like the bank loan rate for the owner.

And whether asset prices keep up with rising inflation is questionable in such an environment, just look at the 1990s to early 2000s, where there was practically only about 10% or so gain.

1990 to 2005 general price increase (= loss of value) in 15 years: 38.6%. That means real estate was generally devalued over more than a decade.
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Owners therefore had a de facto loss of wealth (if not owner-occupied, then the monetary benefit of use would have been added over the 15 years).

Maybe I should have written "strongly simplified" in capital letters so that everyone really sees it...

Of course, there are other criteria that need to be considered (see your contributions)...