(new: With comments from the Construction Ministry and the CDU/CSU parliamentary group in the second and third paragraphs)

BOCHUM (dpa-AFX) - Germany's largest real estate group Vonovia is putting the brakes on new residential construction more than announced at the beginning of November. "We will not have a start on new construction projects this year," Chief Development Officer Daniel Riedl told the Westdeutsche Allgemeine Zeitung (WAZ, Tuesday). "Inflation and interest rates have risen enormously, and we cannot close our eyes to that." One must therefore wait, he said, until capital is available again at acceptable interest rates or until a corresponding subsidy makes construction possible.

The Federal Ministry of Construction criticized the announcement. "Even if we have turbulent times in the construction industry due to the turnaround in interest rates: Vonovia, as the largest housing company, cannot shirk its responsibility," Parliamentary State Secretary Cansel Kiziltepe (SPD) told Handelsblatt. "Vonovia should stop dividend payments and use the money to secure new construction."

The deputy chairman of the CDU/CSU parliamentary group in the German Bundestag, Ulrich Lange, assessed the Vonovia announcement in the newspapers of the Bavarian media group as a "fatal testimony to the construction policy of the traffic light government." "In terms of construction policy, we are already on the precipice - the goals of the traffic light government are being missed by a landslide, and there is no turnaround in sight either." Lange demanded from Construction Minister Clara Geywitz (SPD) "a strategy for new housing construction." This included, for example, clear funding guidelines that created planning security for the companies.

In the WAZ interview, Vonovia CEO Riedl did not provide any precise details about the number of projects affected. "We would have already had a significant number of construction starts this year, for example in Berlin or Dresden, and have pushed them back - as most developers are currently doing." When the general conditions on the capital market come back into balance, he said, the company will be prepared and will be able to implement the projects. He expects construction costs, which rose sharply last year, to ease slightly in the current year. He cited a drop in demand for the construction of apartments as the reason for this.

At the beginning of November, Vonovia had announced its intention to invest significantly less in modernization and new construction in view of higher interest rates and construction costs. Accordingly, the figure was to be 850 million euros in 2023. The volume of investment Vonovia plans to make following the freeze on new construction was not initially disclosed./tob/DP/ngu