Russia’s attack on Ukraine will have a double impact on the housing market in Germany, according to Vonovia, Europe’s largest landlord. “The need for new apartments will certainly continue to increase due to the refugees from Ukraine,” says CEO Rolf Buch. His company is arranging the first free apartments for refugees via municipalities. However, in many large cities, there have hardly been any vacant apartments for years. Vonovia owns a good 565,000 apartments in Germany, Sweden and Austria.
Buch also expresses his concern about the significant increase in energy prices, which are gradually becoming a part of people’s everyday lives. The shortage of imports from Russia has caused gas prices to rise sharply in recent weeks. “Around two-thirds of Vonovia’s apartments are heated with natural gas,” says Buch. The group points out to tenant households that ancillary cost bills are likely to be higher, especially for the current year. “The price increases for many households will not be bearable without government support,” warns Buch – and promises individual deferrals or installment payments.
In fact, the federal government is working on relieving private individuals in this energy crisis: for example with heating cost subsidies or a higher commuter allowance. At the same time, Vonovia is also working on ways to heat settlements primarily with renewable energy in the future. “But at the moment we still need the natural gas,” says Buch.
The tenants’ association criticizes above-average rent increases
Of course, rising rents are also a financial burden for households. Vonovia now charges an average monthly rent of EUR 7.33 per square meter – a good two percent more than a year ago. The group adjusts rents quite regularly to the respective rent index level; he can also increase rents if he modernizes apartments.
Vonovia intends to pay shareholders a dividend of EUR 1.66 per share this year. That’s nominally three cents less than last time. However, the company took over the majority of its competitor Deutsche Wohnen last year – and issued many new shares to finance the merger. Seen in this way, Vonovia pays out significantly more money to investors. Nevertheless, the group temporarily lost four percent in value on the stock exchange on Friday.
The German Tenants’ Association (DMB) criticizes the fact that rents at Vonovia have risen more than the average rent price index that the Federal Statistical Office collects for all of Germany. “The tenants continue to pay the immense profits and dividends,” complains Hans-Jochem Witzke, chairman of the DMB in North Rhine-Westphalia.