What homebuyers need to know

Show caption

Rostock. The topic of home ownership is now being discussed again in politics, after having been virtually absent from the public debate for over a decade since the end of the home ownership subsidy in 2006. With the Baukindergeld, the federal government has launched a new subsidy, since 18. September 2018 it can be applied for. Construction child benefit provides equity subsidy for families with children. For each child, the state contributes 1.200 euros with, which can be used to repay the real estate loan. The subsidy only applies to the purchase or construction of owner-occupied residential property – and it will only be granted this year and next year. This means that if you want to receive the building subsidy, the purchase contract or the building permit must not be dated later than 31 December of the current year. December 2020.

The grand coalition has also planned, but not yet decided on, a guarantee program by KfW. "The guarantee program would be a great help for many apartment buyers," says Stonehedge CEO Nedeljko Prodanovic, "because if KfW would guarantee for the buyer, he would have to raise less equity when buying an apartment." Required equity is a hurdle for most potential homebuyers. While real estate financing would in principle be affordable for many households due to favorable interest rates, not everyone manages to save enough equity capital. A rule of thumb says that you should be able to raise 20 percent of the purchase price yourself – in the case of an apartment for 250.000 euros, that's still 50.000 euros.

As a result, the federal government is considering lowering ancillary purchase costs. The ancillary purchase costs consist of land transfer tax, notary fees and, if applicable, broker commission, and cannot be financed by a normal real estate loan. The German Federal Ministry of Justice is currently drafting a bill for a so-called "Bestellerprinzip" (buyer principle), which would exempt buyers from paying a broker's commission. The draft is to be drawn up in the first quarter of this year, but it is not certain whether it will actually become law.

20 years of exhibition in pictures

Industry creates new jobs

Rostock. "2018 has far exceeded our expectations. Construction companies have once again noticeably increased the number of revolutions at the end of the year – also thanks to comparatively good weather conditions – and have further increased revenues." With these words, Dieter Babiel, Chief Executive of the German Construction Industry Association, commented on the economic indicators for the construction industry published in the latest edition of Current Figures.

According to the report, businesses in the main construction sector would have generated construction-related sales of 127 billion in 2018. euros, which is 11.3% more than in 2017. The HDB had originally forecast a nominal increase of 6%. Despite the stronger price increases in 2018, to which cost increases in construction products and the significant increase in collective wages would have contributed significantly, there would still have remained an increase of 5.4% in real terms.

"To cope with the additional production, construction companies increased their headcount by 25.000 to 837.000 employees added to the annual average in 2018. This means that since the low point in 2009, the industry has seen more than 130.000 new jobs were created," said Babiel, describing the labor market situation in the construction industry.

All about permanent make-up – open day with raffle

Rostock. The real estate market is booming, prices for residential property continue to rise. Here's what a recent report from the Council of Real Estate Experts shows. "A profiteer of the expensive purchase prices are the federal states. That's because higher real estate prices mean more revenue via land transfer tax," says Florian Becker, managing director of the Bauherren-Schutzbund e.V. (BSB).Politicians must now push ahead more efficiently with their formulated plan to promote housing construction. Becker recommends consumers pay particular attention to hidden costs.

8.2 percent more than last year costs the average purchase of a used property, according to the report. So that unexpected costs don't put an additional strain on financing, homebuyers should take a close look. "Anyone who buys a pig in a poke runs the risk of considerable additional costs after the purchase," warns Becker. For example, a modernization backlog could be paid for dearly shortly after purchase. An independent expert helps assess the fabric of the building. In any case, buyers should not allow themselves to be put under pressure. Who concludes a sales contract hastily without examination, runs not rarely blindly into a cost trap, which can load it lifelong."