German builders demand billions in subsidies to stem housing crisis
A PLUNGE in new housing construction in Germany threatens to derail the country’s economic recovery and worsen political divisions, industry groups warned, calling for 23 billion euros (S$33.5 billion) in annual subsidies to address the crisis.
The subsidies should be used to build 100,000 social housing units and 60,000 new affordable homes to be able to accommodate an influx of workers, avoid pushing people into poverty and create new jobs in the economically key sector, they said on Thursday (Apr 11).
“If nothing happens now, Germany will experience a boomerang effect from the housing crisis that will hit the entire economy hard,” said several industry associations in a joint statement.
They also called for building standards to be relaxed to help reduce costs and speed up construction.
The real estate sector was a bedrock of Germany’s economy for years, accounting for roughly a fifth of output and one in 10 jobs. Fuelled by low interest rates, billions were funnelled into property, which was viewed as stable and safe.
Now, a sharp rise in rates has put an end to the run, tipping developers into insolvency as deals freeze and prices fall.
A NEWSLETTER FOR YOU
Property Insights
Get an exclusive analysis of real estate and property news in Singapore and beyond.
The DIW economic institute said on Thursday it expects a nominal decline of 5.4 per cent in residential construction volume this year, which would mean a drop of almost five billion euros in tax revenue for the state alone compared with the previous year. REUTERS
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Property
US single-family housing starts, permits fall in April
Strong demand for ECs could spur competition for Pasir Ris GLS site
Punggol Digital District to open from Q3 with 65% of space pre-committed
Retail units at 20 Cecil Street for sale from S$3.8 million
China property stocks gauge jumps on proposal for home purchases
ESR eyes fourth data centre in Japan