- Berlin provides 18 billion euros for affordable housing
- Plans to make buildings more insulated are put on hold
- Industry hit by high interest rates and falling home prices
BERLIN, Sept 25 (Reuters) – The German government on Monday proposed building regulations as part of a 45 billion euro ($47 billion) rescue package to support the construction industry, which has been hit by high interest rates and rising costs. announced that it would be shelved.
Berlin will provide €18 billion for affordable housing by 2027, with the remaining funding coming from federal states and local authorities.
“We have to significantly increase housing construction activity,” Prime Minister Olaf Scholz said at a press conference ahead of a meeting with industry leaders to discuss the housing crisis in Europe’s largest economy.
“We need more affordable housing.”
The government has announced plans to put stricter building insulation standards on hold indefinitely in a bid to revive the struggling industry. Abolition is the biggest demand of the industry, who say that countermeasures would be too costly.
The government also said it would oppose new European Union legislation that could require millions of buildings to be retrofitted with measures such as insulation and efficient heating systems.
Opponents of the law worry it will impose too much of a burden on governments and homeowners.
For years, low interest rates fueled Germany’s real estate boom, but rapidly rising interest rates put an end to it, sending a string of developers into bankruptcy as deals froze and prices fell. German house prices fell by the most since records began in the second quarter, government data showed on Friday.
“The federal government has finally recognized how serious the situation in the housing market is,” Felix Pacreppa, head of the German Construction Industry Association, told Reuters. “It is critical that federal, state and local governments do this quickly.”
The government will spend 480 million euros over the next two years to encourage the conversion of vacant offices and shops into apartments, according to Construction Minister Clara Geywitz, who will use the money to build 235,000 new apartments. He said that it could be used for.
“Our new funding will enable more people to buy a home, both an existing home and a new build,” she said.
The minister said other measures include extending the so-called “speed bonus” to support climate-friendly heating installations and increasing subsidies for heating system retrofits from 20% to 25%. Said to be included.
The German Construction Industry Association says the sector needs liquidity.
“What we want is an incentive to invest, not a subsidy,” Tim Oliver Muller, the association’s CEO, said in an interview with broadcaster Phoenix.
(1 dollar = 0.9414 euro)
Reporting: Andreas Rinke, Maria Martinez, Riham Alkousser, Writing: Miranda Murray, Mathias Williams, Editing: Friederike Heine, Emelia Sithole-Matarise
Our standards: Thomson Reuters Trust Principles.
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