Financial expert explains: Why the construction of new apartment buildings in Glinde is on hold for the time being

Financial expert explains: Why the construction of new apartment buildings in Glinde is on hold for the time being

According to a report by www.abendblatt.de, the Sachsenwald building cooperative is planning to build seven apartment buildings with a total of 149 apartments on a 1.3 hectare area in Wiesenfeld, Glinde's district. Due to the federal government discontinuing the state KfW's funding program for energy-efficient buildings in the 55 standard, the project had to be put on hold. This has resulted in a new plan with probably only three buildings left, which is expected to delay the start of construction by at least half a year.

The building cooperative is now planning to build up to 50 social housing units in the first step in order to cover the 30 percent share of affordable apartments required by the city. However, the state's financial support of up to 1,500 euros per square meter for social housing is uncertain as the Investitionsbank Schleswig-Holstein is currently not accepting any new funding applications. This could delay construction by at least six months.

The building cooperative plans to use larger buildings and fewer development areas in order to reduce costs. However, it could take years to get a second property up and running. In addition, the federal government has not yet transferred the subsidy for another new building project in Reinbek, which is leading to financial delays.

The company also faces the challenge of modernizing numerous apartments from the 1950s and 1960s, which will lead to an increase in rental contributions. The average basic rent per square meter in the freely financed area is 7.30 euros.

Overall, the Sachsenwald building cooperative and the real estate industry are facing financial and regulatory challenges that could delay the construction of new apartments and the modernization of existing properties.