Financial expert criticizes housing policy: impact on the real estate sector and ways to stimulate the housing market

Financial expert criticizes housing policy: impact on the real estate sector and ways to stimulate the housing market

According to a report by www.stuttgarter-nachrichten.de, the President of the Baden-Württemberg Savings Bank Association, Peter Schneider, harshly criticizes politics in view of the crisis in housing construction. He fears that as a result there will be a permanent loss of capacity in the construction industry and construction will then become even more expensive. The demand for apartments and the needs are great, but the private real estate sector is still in crisis. Schneider advocates a concerted political approach to stimulate housing construction. He blames uncertainties in the market, increased interest rates, and high property acquisition and additional costs. He also criticizes possible income-dependent limits for the granting of residential property loans as a “crazy idea” and calls for measures such as a reduction in additional purchase costs and the possibility of deducting building interest from taxes.

The effects of this situation on the market and the financial sector are already noticeable. New lending by the 50 savings banks in Baden-Württemberg has fallen significantly, particularly drastically in real estate financing. The volume of approved construction loans has almost halved. The willingness to invest among companies and private individuals is decreasing, which is leading to a decrease in new loan commitments. This development on the real estate market and in the construction industry means that prices for residential property could continue to rise due to a lack of capacity and increased costs.

The savings banks in Baden-Württemberg have nevertheless recorded a jump in profits. Profit after taxes rose to almost 1.6 billion euros. Nevertheless, the risk provisions have tripled to 425 million euros, which is due to the uncertainties and unstable market conditions.

This development shows that politicians and the financial sector must take urgent measures to get the crisis in housing construction under control. Concerted cooperation and the implementation of measures to reduce construction costs and taxes could help increase willingness to invest and rebuild capacity in the construction industry.