The renovation of apartment buildings is not least a question of costs. And that’s exactly what many private landlords seem to shy away from. According to a recent survey, more than half of small landlords (53 percent) are not currently planning any renovation or renovation measures.
56 percent of those surveyed cited financial burden as one of the most important reasons. However, significantly more than two thirds (71 percent) simply see no urgency for energy-saving renovation. However, 37 percent also shy away from energy-saving renovations because they find such projects “too complex”.
The survey is part of a “landlord report” that the German Economic Institute (IW) Cologne created for the first time and is available exclusively to WELT. The client and co-author of the report is Deutschland.Immobilien, an online marketplace for investment properties with a focus on age-appropriate living and care properties.
Source: Infographic WELT
For the report, around a thousand private landlords were asked about their current mood. And it was better, as the data shows.
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Michael Voigtländer, real estate expert at IW Cologne, sees the reason for the hesitant attitude not least in the sometimes erratic and difficult to understand political decisions of the past few months.
“Unclear statements from the legislature about funding options as well as discussions about further regulations and provisions have recently led to uncertainty – this is also reflected in the high proportion of landlords who have not currently planned any energy-related renovation measures,” says the economist. “Politicians urgently need to restore reliability in order to stimulate investment in new buildings and advance the energy transition,” continued Voigtländer.
Even if many landlords are not directly affected by the shortage of supply on the rental housing market, they still complain about the lack of new construction. Only 16 percent of those surveyed were completely satisfied with the current housing policy, while 40 percent are dissatisfied.
Source: Infographic WELT
57 percent cite the creation of affordable housing for middle income groups as the main problem, which politicians pay too little attention to. The federal government has launched comprehensive funding for social housing and is providing more than 18 billion euros from 2022 to 2027, supplemented by at least the same amount from the state budgets. But regular housing construction for those middle income classes is only supported if particularly high efficiency classes are achieved.
According to IWD, an information service from IW Cologne, private landlords account for almost two thirds of all rental apartments in Germany, and more than five million households rent an apartment. And it is rarely more than one apartment.
In addition, it is often overlooked that the majority of small landlords are not active in particularly lucrative locations such as Berlin or Munich, but often in regions where household incomes are also below average.
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An interesting figure from the IWD also dates back to 2019, but given the increased costs, little has changed since then: only eleven percent of private landlords, it was said at the time, generated rental income of more than 20,000 euros. Significantly more than half did not even have an annual income of more than 7,500 euros.
The private investor who takes advantage of the shortage in large cities and ignores the rent control rules in the German Civil Code (BGB) – this case is probably the exception on a nationwide average.
Against this background, the upcoming renovation tasks in the existing buildings appear quite ambitious. Many landlords have already carried out energy-efficient renovations at least once in recent years, as the landlord report shows.
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The heating system was most often replaced. In order to reach the next level of climate protection, investments in the six-figure range are necessary, especially in older apartment buildings. By 2030, CO₂ emissions in the building sector are expected to fall from 109 million to 72 to 74 million tons.
As the data collected by the IW shows, many small landlords lack the financial means to undertake further major renovation work. The new Building Energy Act (GEG) has been in effect since the beginning of the year, albeit subject to municipal heat planning.
However, as soon as a new heating system becomes necessary, the installation of a new gas heating system will have consequences for owners and landlords, because in the future they will have to ensure that a growing proportion of the fuel fed in comes from renewable sources.
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For landlords, of all things, the new heating era began with a waiting loop: There are new and higher funding rates for installing new heating – if it meets the GEG criteria. But currently only single-family home owners can submit an application for funding to the responsible KfW. Homeowners’ associations are expected to have their turn from May onwards, landlords’ turn in August.
However, the KfW also emphasizes: Eligible heating replacement projects can be started now by all applicant groups. If the project begins by August 31, 2024, the application can be completed by November 30, 2024. Landlords can at least hope that they will receive partial funding for an expensive investment in new heating.