+
Germany: Vonovia CEO Predicts Rise in Real Estate Bankruptcies
Real Estate

Germany: Vonovia CEO Predicts Rise in Real Estate Bankruptcies

Germany's real estate industry, now in its third year of turmoil, is expected to face more challenges as more companies are likely to go bankrupt, according to Rolf Buch, the CEO of Vonovia, Germany's largest landlord. Buch's grim outlook challenges any hopes for a quick recovery, stating that the sector is experiencing its worst crisis in decades.

Buch predicted a significant number of bankruptcies over the coming months and possibly years, noting that many were already occurring. He described the situation as dire.

For several years, the German property sector thrived due to low interest rates and a strong economy, contributing approximately 730 billion euros annually to the nation's economy, about a fifth of Germany's total output. However, this boom ended when rampant inflation led the European Central Bank to rapidly increase borrowing costs. Consequently, real-estate financing dried up, deals fell through, projects stalled, major developers went bankrupt, and some banks were destabilized.

The industry has urged the German government to step in and provide support.

Buch, who expanded Vonovia through numerous multi-billion-euro acquisitions, accumulated significant debt just as the property crisis hit, forcing the company to sell large numbers of homes. Vonovia, which owns around 550,000 apartments, reduced the value of its properties by nearly 11 billion euros in 2023, leading to a record loss of 6.7 billion euros. Since 2022, the company has cut the value of its properties by more than a fifth, excluding rent increases, as rising interest rates drove down prices.

Despite the challenges, Buch mentioned that Vonovia had completed major writedowns but suggested there could still be minor adjustments in the future.

Germany's real estate industry, now in its third year of turmoil, is expected to face more challenges as more companies are likely to go bankrupt, according to Rolf Buch, the CEO of Vonovia, Germany's largest landlord. Buch's grim outlook challenges any hopes for a quick recovery, stating that the sector is experiencing its worst crisis in decades. Buch predicted a significant number of bankruptcies over the coming months and possibly years, noting that many were already occurring. He described the situation as dire. For several years, the German property sector thrived due to low interest rates and a strong economy, contributing approximately 730 billion euros annually to the nation's economy, about a fifth of Germany's total output. However, this boom ended when rampant inflation led the European Central Bank to rapidly increase borrowing costs. Consequently, real-estate financing dried up, deals fell through, projects stalled, major developers went bankrupt, and some banks were destabilized. The industry has urged the German government to step in and provide support. Buch, who expanded Vonovia through numerous multi-billion-euro acquisitions, accumulated significant debt just as the property crisis hit, forcing the company to sell large numbers of homes. Vonovia, which owns around 550,000 apartments, reduced the value of its properties by nearly 11 billion euros in 2023, leading to a record loss of 6.7 billion euros. Since 2022, the company has cut the value of its properties by more than a fifth, excluding rent increases, as rising interest rates drove down prices. Despite the challenges, Buch mentioned that Vonovia had completed major writedowns but suggested there could still be minor adjustments in the future.

Related Stories

Gold Stories

Next Story
Infrastructure Urban

NABARD Holds Seminar on Vigilance, Integrity and Good Governance

National Bank for Agriculture and Rural Development (NABARD) organised a seminar on “Vigilance: Strengthening Integrity and Good Governance” on 25 August 2026 at its Head Office in Mumbai as part of the ongoing Vigilance Awareness Campaign 2026 being observed from 17 August to 16 November 2026, with the theme “Probity for Prosperity."" The seminar was graced by Suresh N Patel, Former Central Vigilance Commissioner, Government of India, as the chief guest and keynote speaker.  The programme was attended by G S Rawat, Deputy Managing Director, Dr Ajay K Sood, Deputy Managing Dire..

Next Story
Equipment

XCMG Unveils World's First 14,000-Ton Ring Crane for Heavy Lifting

XCMG has announced that the first main unit of the world's first 14,000-ton ring crane has rolled off the production line, marking a historic breakthrough in ultra-heavy lifting technology. Jointly developed by XCMG and Sinopec Heavy Lifting & Transportation Co., Ltd., the crane will be the largest-capacity ring crane ever built, setting a new benchmark for major construction projects worldwide.The crane features a modular configuration comprising two main units that work in tandem. The first main unit has completed final assembly and can independently perform lifting operations. Once both..

Next Story
Infrastructure Urban

Thriveni Logistics orders 200 tip trailers from Jagdamba trailers

Jagdamba Trailers (JTPL), one of India’s growing trailer manufacturers, has secured a significant order for 200 Tip Trailers from Thriveni Transport and Logistics Pvt. Ltd., a leading mining and logistics company serving operations across India and overseas.The order, placed for iron ore transportation, is a major milestone for JTPL, particularly as the company secured the business after competing with more than 10 established trailer manufacturers. It also strengthens an already successful relationship between the two companies. Approximately one and a half years ago, Thriveni Transport and..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code