Saxony's housing cooperatives are investing more, but building fewer apartments

Despite higher investments, Saxony's housing cooperatives built fewer apartments last year. Investments totaled 600.3 million euros in 2023 and were therefore 4.4 percent higher than in the previous year (574.9 million euros), as announced by the Association of Saxon Housing Cooperatives (VSWG) on Thursday. However, the 10.5 percent increase in construction costs led to lower construction output. "It's bitter: we are investing 1.6 million euros per day in our portfolio and receiving less work in return than in the 2022 financial year," said Mirjam Philipp, board member of the VSWG, according to the press release. "The balancing act between affordable rents and refinancing investments is becoming increasingly painful."

The focus of investments was on maintenance (344.4 million euros) and modernization (192.8 million euros). New construction, on the other hand, remained at a low level (63.1 million euros). 286 new apartments were built - 46 more than in 2022, but still less than the 300 to 500 new apartments per year from 2015 to 2021. This was due to sharp increases in construction costs, significantly higher interest rates on loans and unplannable or unhelpful subsidies for new builds.

Construction costs of up to 4,500 euros per square meter are being charged for new build projects. "Without subsidies, this would lead to rents of between 15 and 20 euros per square meter, which is illusory for the Saxon housing cooperatives," said Mirjam Philipp. In December, the usage fee, which corresponds to the net cold rent, averaged 5.44 euros per square meter for the Saxon cooperatives (2022: 5.31 euros/m2). As in previous years, there were more withdrawals than new builds in 2023. 545 apartments were taken off the market for good, bringing the total to 294,583 apartments, almost 200 fewer than in 2022. As at December 31, 2023, almost 24,000 of these were vacant, a decrease of 906 apartments.