Some half of German private assets are invested in real estate. The trade in offices, flats and private houses affects the economy as a whole, a fact amply demonstrated by the bursting of the US real estate bubble, which threw the world economy into crisis.

When house prices fall, their owners feel poorer and ease up on their consumption. In contrast to many other countries, there has been no real estate crisis in Germany, where the property markets had already soared after reunification in 1990 and prices have since stayed relatively low. Additionally, when it comes to financing real estate, security heads the list of priorities and this has a calming effect on the property markets. With secure investments again in demand, many international investors are keen to invest in the German market. However, they lack suitable investment instruments, since real estate shares are particularly underdeveloped in Germany.

With buildings producing a third of carbon dioxide emissions, real estate has an important role to play in combating climate change.. Since modern homes require only a fraction of the energy used by old buildings, energetic refurbishment would make a great deal of sense. Yet this requires money and only pays off decades later – perhaps not within the lifetime of many investors, more than half of German homeowners being over 60 years of age. The government has realised that owners require support, but the subsidies developed to date are too complicated. If existing measures were bundled into a single package, that would be an important step in the right direction.

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