In this connection we observe that to prevent abuse of the fiscal relief for
interest paid on loans, limitation of the income-tax deductability should
not be sought in the absolute amount of the loan, which would impede
the sale of more expensive dwellings and consequently the through-
flow. If there is to be a limitation, let it be determined that tax reliefshall
not be applicable for loan amounts which exceed 100% of the purchase
sum (and/or the market value). Such a measure does not distort
relations on the real estate market and forms no impediment to the
through-flow.
The factors mentioned above, together with the risk of squatting, will
definitely lead to the entrepreneurs' adoption of an extremely reserved
attitude toward starting construction of dwellings, certainly if the terms
of the unoccupied property act, now under consideration, are too
restraining.
At present, more than in the past, demand is directed towards rental
housing which is no surprise. In this period of uncertainty the public
prefers a wait-and-see attitude with respect to the purchase of dwellings
for owner occupancy. The investment is seen as expensive (high
interest rates versus a low inflation rate) and the gain from an increase
in value of the dwelling has become less certain. A factor which
particularly encourages this wait-and-see attitude is the generally low
level of rental rate and the substantial public authority subsidies. As a
matter of fact, it is generally expected that the financial aid measures
will diminish due to the lack of funds, for instance in the area of welfare
housebuilding, town redevelopment and improvement of dwellings,
etc.
This means that expenses will increasingly have to be offset by higher
rents. In this connection we anticipate an increase greater than the trend
here. This will cause the housing costs ratio, which is very low in the
rental housing sector, to rise (in 1980 50% of the tenants paid 11,1% or
less of their income and 30% of the tenants paid 8% or less).
We take the view that the public authorities should direct their policy
towards attaining a greater equilibrium between owner-occupied and
rental housing.
Furthermore a very important condition to activate the large latent
demand for owner-occupied dwellings is the decline of interest rates.
This decline can be attained in part if the government puts its affairs in
order and lessens the substantial pressure on the capital market that it
causes itself.
The operation of rental housing denotes the traditional relationship
between rental incomeand expenses which is often impacted by saving
through deferral of maintenance. A way out of this problem through the
sale of these dwellings to tenants or, on becoming vacant, to third
parties, is made increasingly difficult by local authority measures.
We fear that maintenance of the housing stock will ultimately suffer the
most from this, which will adversely effect the quality of our national
stock of dwellings. It may be deemed clear enough thatthefinanciers of
these dwellings are in serious danger of becoming victims of sudden
and locally-bound measures of the municipal authorities which do not
fail to impact value.
Demand for favorably situated office space, especially in the big towns,
remained good in 1980, albeit that a further shift took place here from
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