Key messages and learning

Kirstina pointed out that the currently discussed EPBD (trilogue) with its energy efficiency certificates’ harmonization and the minimum energy performance standards will have a strong impact on homeowners (value). The Energy Efficiency rates in Germany are quite low, with 30% of the German building stock in Class G,E and below, indicating a high demand for refurbishment. The speaker explains the building energy act of 2020, which introduced new buildings standards (to energy efficiency house 55) and an obligation to all newly installed heating systems in Germany to be operated with 65% renewable energy (from 2024). The speaker also mentions the statistical details of the housing stock in Germany: Germany has a housing stock of 19.4 million residential buildings, containing 40.5 million apartments as of 2023. More than 10 million of these apartments are organized as HOAs, and approximately over 15 million people in Germany live in HOA apartments. Kristina highlights that buildings built before 1978 are in need of repairment, and the rate of refurbishment for these buildings is lower than the national average. There is a lack of certified BAFA- energy consultants, massive shortage of materials and skilled workers and the increase in construction prices has made it difficult to provide the required three offers for energy efficiency upgrades to HOAs. During Corona, many HOA meetings have not taken place for over two years, which has aggravated the problem.

The survey conducted in 2022 examines the perspective of property managers and homeowners in Germany on long-term renovation planning and financing of energy-efficient investments. Property managers have doubts about the feasibility of the measurement’s economic value, and there is a lack of information about renovation needs and legal requirements. While HOAs may have a keen interest in necessary renovation options, they often lack information about the need for renovations. Property managers may not prioritize long-term renovation planning in HOA meetings, as they believe that owners are not interested in it. This suggests a potential communication gap between HOAs and property managers regarding the importance of renovation planning.

Since 2007, HOAs in Germany are entitled to borrow HOA loans. The application and contract is uncomplicated, fast and signed by the property manager who serves as a direct contact. Currently, German banks such as Hausbank München, DKB, BfW, and TEN31 provide HOA loans, and the rejection rate is very low. HOA loans offer the following advantages:  no collateral, credit checks and no guarantess or securities are required, personalized support, and fast payout. HOA loans are usually for five to eight years, with a preference for step-by-step renovation due to a lack of long-term planning.

Kristina discusses challenges associated with HOA loans, particularly with joint liability and lack of knowledge among property managers which created a mistrust in this financing instrument. The suggestion is to create attractive conditions and incentives for longer-term financing of deep renovations and implementing state or federal guarantees for housing loans. Additionally, property managers need further training, exchange with other best practices that took out a HOA loan to take out the fear of these loans.

The speaker also mentions Germany as an example of subsidy support for energy efficiency in buildings, with various departments, ministries and state development banks offering their own programs and subsidies. Further on, Kristina presents current developments in energy-efficient renovation and refurbishment in Germany. A reform was implemented in 2022, which shifted funds towards renovation instead of new building subsidies. It abolished subsidies for fossil heating and instead it introduced a worst performing buildings bonus. Although,  several subsidies and financing instrument are in place in Germany, they have not yet reached HOAs as the uptake of funds remains very low (>1%). The speaker suggests criteria to make energy investments more feasible, such as targeted information campaigns, incentivizing property managers to place energy efficiency topic at the board meetings, and default guarantees by federal states. One-stop shops for energy refurbishments and how-to guides are also useful. Preliminary results indicate the need for funding options, long-term financing options, compliance with current legal minimum standards, and informative leaflets for different types of buildings.