The costs for construction financing in Germany have increased significantly. Currently, interest rates for a ten-year mortgage are around 4.5 per cent; for longer terms, rates tend towards five per cent. This development severely complicates access to home ownership, especially for families and households with average incomes.
Henrik Fork-Weigel, Managing Director of the Bauherren-Schutzbund e. V. (BSB), states that given the current dynamics in financial markets, no quick easing of the interest rate situation is to be expected. This exacerbates the already challenging financing situation. The rise in mortgage interest rates is not solely due to monetary policy; bond yields, inflation rates and geopolitical uncertainties also contribute.
Need for Funding Programmes and Relief
According to Fork-Weigel, reliable and effective funding programmes, as well as relief from the high ancillary purchasing costs, are essential for private builders and buyers. Existing funding instruments are important and must be secured for the coming years, and made more attractive for owner-occupying builders and buyers. This applies in particular to creating a noticeable interest rate advantage compared to market loans.
Fork-Weigel emphasises that current funding only addresses part of the problem. Many households fail not due to the monthly loan repayment, but already due to a lack of equity for ancillary purchasing costs and the required financing share. Funding must additionally start at this point. The upcoming reorganisation of the KfW funding landscape offers an opportunity to implement these adjustments.
Demands for Improving Framework Conditions
The Bauherren-Schutzbund formulates concrete demands to facilitate the acquisition of residential property:
- —Securing and improving low-interest credit programmes to create planning certainty.
- —Reducing the equity hurdle through targeted measures that replace equity.
- —Urgent reduction of ancillary purchasing costs, for example, through a reform of the real estate transfer tax with allowances for the first-time acquisition of owner-occupied residential property.
In Fork-Weigel's view, funding must not be reduced to loans alone to preserve home ownership for the middle of society. A combination of effective interest rate subsidies, equity assistance, and reduced ancillary costs is required.
