Germany’s housing sector slumps into crisis, with 1 in 5 developers cancelling projects in August
- German Chancellor Olaf Scholz to meet leading players in the property sector for talks as he seeks to jump-start construction
- The crisis could snowball into a social disaster if the building slowdown crashes into the rental market
Valeriy Shevchenko felt like he made the purchase of his lifetime when he beat a queue of prospective buyers to secure a two-bedroom flat in one of Berlin’s most popular districts.
Two years on, the 33-year-old’s housing dreams have come crashing down after the developer of his new home, Project Immobilien, went bankrupt.
Hit by a sudden jump in interest rates and raw material costs, twice as many developers have filed for insolvency over the last year than the previous 12 months.
Like hundreds of homeowners-to-be across the country, Shevchenko found construction of his new home suddenly halted, as workers cleared out of the site where the concrete skeleton of the building stands, with no windows.
“From the middle of August, the construction was frozen. The cabinets for the workers here, the crane in the middle, everything moved away,” said Shevchenko at the site, shell-shocked by the setback.