Cooperative apartments under threat from budget freeze - funding on hold

Cooperative apartments under threat from budget freeze - funding on hold

According to a report by www.focus.de,

Housing cooperatives and housing construction are facing new challenges as the federal government's budget freeze is initially blocking funding for the acquisition of shares in cooperatives. As a result, the financing of new construction projects is at risk and could potentially lead to a halt to construction. In addition, additional funding programs are affected by this stop, which affects various areas such as energy-efficient renovation, age-appropriate renovations and hardship programs.

The KfW Bank's funding freeze is particularly affecting housing construction, with 561 cooperative apartments in Bavaria alone threatened by a construction freeze. Further construction projects could also be at risk, as the loans from the KfW program were already firmly planned. This could lead to fewer new buildings and continued high rents on the open market.

The effects of this development are noticeable both on those looking for accommodation and on the entire housing market. In addition, programs for private owners, energy renovation and hardship programs are also affected, which limits the financing options for various construction projects.

For the housing market and the financial sector, this means a possible slowdown in new construction and a further worsening of the housing shortage - which could lead to rising rents in the long term. It remains to be seen how the government will respond to this development and whether alternative funding options will be created to support housing construction and cooperative models despite the budget freeze.