The decarbonization of German housing construction requires investments of around 1.4 trillion euros in the private housing sector by 2050. This amount is necessary to achieve climate neutrality and significantly reduce CO2 emissions, which currently account for about 14% of all emissions in Germany.
Effects on Property Prices and the Economy
- Property prices are expected to rise due to these investments, as climate-neutral construction methods and renovations are associated with higher costs.
- At the same time, it is expected that the value added of the real estate sector could increase by about one trillion euros by 2050, which will benefit the overall economic performance in the long term.
Job Opportunities
- Decarbonization acts as a significant job engine: About 107,000 new jobs could be created in Germany, especially in the construction, trades, and technology sectors.
Need for Government Incentives
Since savings on energy costs alone are not enough to cover the high investment costs, government funding and incentives are essential to motivate private owners to switch to climate-neutral buildings.
Context
The German housing sector faces major challenges: The demand for affordable housing remains high while environmental regulations are driving up construction costs. Nevertheless, the shift towards climate-friendly buildings is indispensable for achieving national climate goals.
Additionally, the rising CO2 price under the new emissions trading system ETS-2 from 2027 will significantly increase operating costs for unrenovated buildings. This further increases the pressure on owners to energetically refurbish their properties.
Conclusion: The decarbonization of German housing construction is an enormous financial challenge with a volume of around 1.4 trillion euros by 2050. However, it also leads to rising property values and significant employment effects—provided that suitable political frameworks are created and government funding measures are implemented.