The German real estate industry is hoping that the new government will be quick to implement reforms to resolve the country’s housing crisis.
The Union, comprising the Christian Democratic Union (CDU) and Christian Social Union (CSU), won Germany’s elections on Sunday with 28.5% of the votes and will need to form a coalition with another party or parties, such as the Social Democratic Party (SPD), to govern the country.
Alexander Lackner, CEO of real estate investment platform Neworld, said: “The incoming government must act quickly and introduce laws in an uncomplicated manner. We need the shift now; we no longer have time for endless discussions.”
Social tensions could increase further if the new government is unable to find a solution to the urgent housing shortage, with “left and right demagogues” ready to exploit the situation, he added.
The former governing coalition of social democrats SPD, liberal party FDP and Greens failed to build the 400,000 houses promised per year, despite high demand especially in metropolitan areas.
“Only more construction activity will relieve the pressure on the housing market, not the extension of rent control. The same applies to all other segments such as healthcare and senior living,” Lackner said.
Einar Skjerven, CEO of Skjerven Group, said he expects the new chancellor – most likely to be Friedrich Merz, the leader of the Union alliance – to bring some “dynamism” to the market through new framework conditions, alongside economic and financial stability that housing needs as long-term investment.
“The housing market in recent years has been poor in [terms of] positive impulses and poor in opportunities,” he said. “That may have been good for existing owners and tenants, but it was bad for those looking for housing, the transaction business and housing construction.”
Arnaud Ahlborn, CEO of Industria Immobilien, said it was surprising how housing policy did not play a bigger role in the election campaign, which was overshadowed by economic and immigration issues.
“For the real estate industry, this means that it has to come to terms with political uncertainty. Given the enormous housing shortage in metropolitan areas, this is bitter,” he said.
Industria does not expect policies at the federal level to provide any decisive stimulus for the real estate industry in the next six months, Ahlborn added.
The SPD’s manifesto includes a proposal for a €100bn state fund, Deutschlandfonds, aimed at mobilising public and private capital for investments in electricity and heating networks, hydrogen infrastructure, e-charging stations and housing construction.
According to the SPD’s manifesto, large institutional investors, including insurance companies and Pensionskassen – one of the vehicles for offering occupational pensions – will be able to invest in housing through the Deutschlandfonds.
Like the SPD, the Greens expects to make housing more affordable by limiting rent increases and promoting social housing construction.
The Union advocates for effective and balanced tenant protection, recognising high rents in many metropolitan areas as a significant issue, and also supports social housing initiatives.
Francesco Fedele, CEO of real estate financing firm BF Direkt, said: “It is important that we quickly get a new and stable government. However, there is a risk of a stalemate on many real estate issues.
“We don’t expect fundamental improvements to the framework conditions for the real estate industry, but rather a lot of small compromises.”
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