The federal election has far-reaching consequences for many areas of the economy, especially the real estate market. Political decisions in the areas of tenancy law, new construction subsidies, and tax incentives influence how purchase prices, rents, and investments develop. But it is not only the housing market that reacts to new political decisions; the office market is also influenced by economic policy measures and economic stimulus programs.
Election campaigns and uncertainty: why the market often stagnates before elections
A certain degree of caution can often be observed in the months leading up to the election. Buyers, investors, and project developers are waiting to see what housing and economic policy measures the new government will implement. There are considerable differences between the parties, particularly on issues such as rent controls, new construction subsidies, and tax incentives.
While some are calling for stronger regulation of the rental market, others are focusing on more new construction and fewer bureaucratic hurdles for investors. Tighter rent controls, for example, could make housing construction less attractive to investors, which could lead to a shortage of supply in the long term. On the other hand, new subsidy programs could make it easier to buy a home and motivate more people to do so.
Impact on the office market: economic policy as a decisive factor
The office market is also affected by political decisions, albeit in a different way. The economic policy orientation of the new government can be decisive for how companies develop and whether they expand or cut jobs.
Business-friendly policies with incentives for start-ups and investment can increase demand for office space. If, on the other hand, stricter tax or regulatory requirements are introduced, companies may be more reluctant to act, which would have a dampening effect on the office market.
Especially in times of change, when working models are changing (e.g., remote work or home offices), demand for office space is already undergoing significant change. New government subsidies, low interest rates, and support for the domestic economy play a decisive role in this area.
Conclusion: Federal elections as a catalyst, but not the only factor
In the long term, it is clear that political decisions alone cannot completely control the real estate market. Other factors such as the general economic situation, interest rate policy, and construction costs also play a decisive role. Nevertheless, the federal election remains an important event that can provide impetus for both the residential and office real estate markets. Anyone investing in real estate should keep a close eye on political developments and respond flexibly to new conditions. Foreign investors and companies will do the same in order to assess the conditions for making decisions in Germany.
