Representatives from the German real estate sector have shared their views on the federal government’s performance in its first 100 days, highlighting both positive developments and ongoing challenges.
Ulrich Creydt, tax advisor and managing director of Ypsilon GmbH Steuerberatungsgesellschaft:
“In my opinion as a tax advisor, the federal government has achieved some good things in its first 100 days. However, I am missing the bigger picture, which would enable more people to become homeowners, boost the economy and simplify tax law.
The gradual reduction in the corporation tax rate is the right move, especially in an international comparison. However, it would have been desirable to make the first step of the reduction retroactive to 1 January 2025. This would mean that the corporation tax rate would already be 14 per cent for the current year. As it stands, the first reduction will not come until the beginning of 2028.
I believe that a “construction boom” would be triggered if all first-time buyers who use their own four walls did not have to pay land transfer tax. Existing measures in individual federal states, such as the “Hessengeld”, do not achieve much and are complicated to apply for. The most important reason why many households cannot afford to buy their own home is the high proportion of own funds required. The property transfer tax is the biggest chunk of this. A tax waiver for this group of buyers would ease the strain on their wallets and help them build up their private assets.
If a tax expert from our company were Chancellor, he would radically simplify tax collection: fewer declaration requirements and the immediate abolition of the solidarity surcharge and trade tax. These should be replaced by a system of income and corporation tax for local authorities. This would also end competition between municipalities to offer the lowest possible trade tax rates and contribute to fair tax revenue for all local authorities.
I give the German government’s foreign policy a “thumbs up” – especially in Europe. European investors are increasingly interested in investing more in Germany again.”
Francesco Fedele, CEO, BF.direkt AG:
I see both positive and negative aspects for the real estate industry. It started with big promises for more economic growth. Some approaches are promising, such as tax relief for companies, which should help to stimulate the economy, among other things. Many companies also want to invest billions of euros in Germany, if their promises following a meeting with Chancellor Friedrich Merz in mid-July are to be believed. The planned spending on defence and infrastructure will also likely support the economy.
However, the associated increase in government debt financed by borrowing could cause inflation to rise. Higher US tariffs could have the same effect on EU countries. This would dampen consumer sentiment and could also lead to higher interest rates on real estate loans. The European Central Bank (ECB) seems to recognise the danger and, after several interest rate cuts, decided not to adjust interest rates at the end of July.
The German government cannot do much about the global political challenges. It can only try to respond appropriately.
In stark contrast to housing policy, where it has greater scope for action, but I see contradictory signals. On the one hand, the streamlining of building regulations is intended to help speed up the granting of building permits.
I doubt that this “approval turbo”, if it takes off, will trigger a “construction turbo”. This is because many factors that inhibit commercial and private housing construction continue to exist, including high land, material and labour costs. For private builders, there is also the land transfer tax.
Anyone wishing to build and rent out a flat could be deterred by the extension of the rent cap. Plans to tighten index-linked rent clauses and the letting of furnished flats are doing the rest. The government’s announcement that it will cut funding for energy-efficient renovations by a fifth is also contributing to further uncertainty. The real estate market needs reliability and predictability.”
Prof. Dr Felix Schindler, Head of Research & Strategy, HIH Invest Real Estate:
The mood in the German economy has brightened in the first 100 days of the new federal government. However, there is still a lack of concrete measures to strengthen Germany as a business location and – with regard to the real estate markets – to create more living space and to make construction processes and projects more flexible, less bureaucratic, more digitalised and faster (the so-called “construction turbo”). The amendment to the Building Code already initiated by the previous government is intended to significantly reduce bureaucratic hurdles and speed up planning processes. The law is scheduled to be passed in autumn.
The most far-reaching economic policy decision was taken by the last Bundestag before the formation and appointment of the current federal government: the conditions for the establishment of a special fund for infrastructure and climate neutrality amounting to 500 billion euros. It is now up to the federal government to use the framework conditions and financial leeway created for structural reforms and sustainable growth.
We can only hope that the federal government will follow up its announcements on strengthening Germany as a business location and the plans of the Federal Ministry of Housing, Urban Development and Construction with concrete action. It is important to provide the right impetus so that private capital from Germany and abroad is once again invested in Germany and the course is set for higher long-term growth and thus greater prosperity in Germany.”
Pepijn Morshuis, CEO of Trei Real Estate:
The black-red coalition has sent important signals on the issue of housing construction – in particular with the draft law on accelerating housing construction. Shortened approval processes and the facilitation of redensification can actually accelerate new housing construction.
We also welcome the fact that Federal Building Minister Verena Hubertz explicitly sees redensification and the conversion of existing commercial space – such as supermarket roofs – as part of the solution. This is exactly where we come in at Trei Real Estate: we are currently planning and developing projects in Berlin, Wiesbaden, Hamburg, Munich and Düsseldorf on former commercial sites – some with, some without commercial ground floor uses (e.g. local amenities or restaurants), depending on the specific location conditions.
But while the federal government is pushing ahead with construction, it is putting the brakes on in other areas: not only has it extended the rent cap, it has also announced further tightening of tenancy law, including stricter regulation of index-linked rents. This threatens to make new housing construction even less attractive for private investors.
My conclusion after 100 days: the federal government has recognised the urgency of the situation – now it must show that good intentions can be turned into practical solutions. The measures adopted so far are not enough to increase the supply of housing. If you want to create housing, you don’t need symbolic politics, but reliable framework conditions that make building possible and worthwhile again.”
Arnaud Ahlborn, Managing Director of INDUSTRIA Immobilien GmbH:
The new federal government has set the course for its housing policy – some of it in the right direction, some of it with problematic side effects. Above all, the “construction turbo” sends an important signal to the industry. Faster approval procedures, the simplification of building regulations and better coordination between the federal, state and local governments are urgently needed to get new housing construction back on track. The announcements give cause for cautious optimism – the decisive factor will be how quickly and consistently these measures are implemented. Reducing bureaucracy must not remain lip service, but must be reflected in accelerated project implementation.”
Thomas Wirtz, Managing Director of INDUSTRIA Immobilien GmbH:
“We take a critical view of the extension of the rent cap in the new federal government’s 100-day review. Although this instrument provides short-term relief for individual tenant households, it inhibits investment in urgently needed new construction and reduces the attractiveness of the residential property market for institutional investors. Instead of treating the symptoms, we need structural responses to the housing shortage – for example, through more supply and targeted incentives for new construction.
The announced cuts in subsidies for energy-efficient renovation are also worrying. Given the ambitious climate targets in the building sector and the massive rise in construction costs, this decision is a step backwards. Energy-efficient renovation of existing buildings is a key element of the housing industry – also in terms of social compatibility.”
