2024-08-03 07:15:24
German Chancellor Olaf Scholz is renewing government efforts to tackle the housing crisis in a country facing recession and preparing for elections in which the far-right could strengthen its position, Reuters reported.
The government has scheduled a meeting between politicians, ministers and representatives of the real estate sector in Hamburg on December 6, according to industry representatives.
The meeting will be devoted to the problem of the housing shortage, which has been exacerbated by the bankruptcy of major developers and the collapse of investment and financing.
The previous such meeting was in September last year and resulted in a number of government proposals but little concrete action.
Tim-Oliver Müller, head of the German Federation of the Construction Sector, expressed dissatisfaction that “much of what was discussed earlier did not lead to anything”. “We need concrete steps and real actions,” he said.
Representatives of the construction sector are calling for changes, including a reduction in real estate sales tax, which in Germany can reach 6 percent of the price of a home, and a relaxation of regulations that will lower construction costs.
The government did not respond to requests for comment, although the housing ministry said it was working to support the sector with measures such as speeding up the building permit process.
For years, low interest rates and a strong economy fueled a boom in Germany’s real estate sector, but it ended in 2022 when high inflation forced the European Central Bank to quickly raise the cost of lending. The ensuing crisis led to delays in deals, stalled projects and bankruptcies of leading developers. The latest data continue to show an accelerated decline in apartment building permits, as well as a further decline in the number of new building starts in the first half of the year, BTA reports.