Vonovia: Rising rents and financing gaps until 2025 - real estate market facing turbulence due to interest rate increases by the ECB.

Vonovia: Rising rents and financing gaps until 2025 - real estate market facing turbulence due to interest rate increases by the ECB.

According to a report by finanzmarktwelt.de, the German real estate market is stuck in a downward spiral due to the ECB's aggressive interest rate hike cycle. This not only has consequences for the construction industry and project developers, but also for many tenants. The real estate crisis is leading to rising rents and exacerbating the housing shortage in Germany. The real estate group Vonovia is responding to this by planning to raise 3 billion euros through the sale of assets. The closure of the construction industry will worsen the construction crisis until at least 2025.

The effects on the real estate market are clearly noticeable. The increased housing shortage is leading to higher rents, which is putting tenants under pressure. Since the rent index in Germany follows inflation with a delay, rents will rise more sharply in 2024 than this year. This development could lead to landlords like Vonovia strengthening their finances and stopping the decline in valuations. However, there is a risk that tenants will have to bear the costs of energy-saving renovations if the subsidies are no longer available, which would lead to a further increase in rents.

The closure of the construction industry and the worsening of the construction crisis until at least 2025 also have an impact on project developers who are in difficulties due to high loan interest rates. The postponement or non-implementation of real estate projects exacerbates the existing housing shortage.

Overall, it is clear that the real estate crisis in Germany is leading to major challenges for the real estate market and is putting both landlords and tenants under pressure. It remains to be seen how the situation will develop in the coming years.

Source: finanzmarktwelt.de