Germany amidst an ongoing housing crisis
With the rise of real estate prices, the issue with high capital requirements is becoming an obstacle for new prospective homeowners and real estate investors alike. Today, getting a home without a bank loan has become nearly impossible. By relying on banks, the system becomes fragile, as the possibility of illiquidity of the borrower becomes a real danger once the economy takes a downturn and the interest rates have to increase. Combined with higher unemployment, this could result in a disaster not only for the real estate sector, but also for the whole world economy.
It might surprise you, but even the most thriving economies are facing considerable issues when it comes to affordable housing. After all, it is logical, as these countries are seeing the highest increase in population due to high birth rates and immigration, which are a consequence of the good living conditions and high life standards.
Germany is not an exception – in fact, the country is Europe’s leader in lowest home ownership rates, as only about 46% of people own the property they are currently occupying. In Germany, there are multiple legislative measures that are aimed at evening out the scales a bit in the attempts to match the demand, which currently is outpacing the supply by a considerable margin, leading to the issue with homeownership getting even more out of hand. Some of these include subsidiary programs that support low-interest loans for housing cooperatives, which have been a good instrument working against the crisis. However, recently it has been announced that this program will be put on hold for an unknown duration due to budget cuts.
Beyond that, Germany is also observing new cooperative construction projects being decommissioned. Putting the loans on hold for projects that are already underway is also a reality, which presents considerable challenges, as it will result in many of these projects unable to be completed. The system that we mentioned earlier – high prices causing for the absolute necessity of a loan – is starting to collapse. The result will be fewer new apartments and, as a result, an ever worse housing shortage leading to continued high rents and property prices on the open market.
There are also further supportive programs for private homeowners that are seeing budget cuts, affecting energy refurbishment of existing buildings, conversion grant programs for elderly citizens and special subsidiaries for housing companies that were initiated due to the abnormally high energy costs over the last two years. This is all happening amidst further cuts in new construction projects that is going to widen the gap between demand and supply. It overall seems that the government is failing in its attempts to control the housing crisis, which will lead to even higher prices in the future, essentially surpassing a point at which reversing the situation that has been created would become nearly impossible.
Blockchain Property Gate: a glimpse of hope for real estate
It is evident that Germany and many other thriving economies have to perform considerable legislative and economic maneuvers in order to ease the ongoing housing crisis. At the same time, utilizing the latest concepts in technology can provide ingenious mechanisms for both reducing the costs of real estate project development by utilizing the resources more efficiently and ease the fundraising process by reducing legal barriers and including smaller investors. This, in turn, would potentially result in lower prices of real estate and a sector that is more accessible for all investors.
Blockchain Property Gate is a new project founded upon decades of experience in the traditional real estate sector that utilizes the advantages of blockchain technology. The mission of Blockchain Property Gate is to provide a whole methodological and technical framework that will lay out the foundations for a more democratic housing market, which does not depend on bank loans and regulatory measures to keep it in check. Starting with the German market, Blockchain Property Gate is planning to tackle the international scene with its disruptive model.
The project focuses on the careful selection, acquisition and renovation of properties according to a tried and tested methodology. The goal is to gradually acquire real estate assets at below average market prices that can both generate continuous cash flow and be renovated to increase their value in the short term. This in turn is estimated to result in cost savings of between 20 and 30% for prospective homeowners, tenants and real estate investors. The whole model becomes possible through the BPGT security token, which provides the necessary capital for the project, rewards investors with net profit made by Blockchain Property Gate and ensures an easy entry into the real estate market regardless of the starting capital.
You can learn more about the mission of Blockchain Property Gate and sign up for the white list at www.blockchain-property-gate.com.
