The rent cap has been in effect in Berlin since February 2020, the deadline being November 23. Analyzes by the real estate platforms ImmoScout24 and Immowelt have shown that there has been an even higher demand pressure since the introduction of the rent cap than before.
In order to prevent rents in Berlin from continuing to rise as strongly as in previous years, the “Law on Rent Limitation in Housing in Berlin” – the rent cap – has been in force in the capital since February 2020. So-called “excessive rents” will be banned from November 23rd, and for rental properties built before 2014, the price is expected to drop by five percent year-on-year.
That sounds good at first, but unfortunately it doesn’t have the desired effects – this is the result of both an analysis by the real estate portal ImmoScout24 and an evaluation by the Immowelt platform.
ImmoScout24: With the apartment rents, the supply drops by more than 40 percent
ImmoScout24 compared data on the Berlin housing market from September 2020 and September 2019. The result: the rents of existing apartments built before 2014 are now the legally stipulated five percent lower (from an average of 12.91 euros to an average of 12.26 euros) – but the supply of rental properties from this segment is a whole 59.1 Percent down. According to the analysis, the total supply of rental properties has decreased by 41.5 percent.
Dr. Thomas Schroeter, managing director of the real estate portal, was able to explain this to “WirtschaftsWoche” at the beginning of the year: If rents fall, it can be assumed that owners fear that they will no longer be able to generate planned returns.
“[Es] the desired effect of the rent cap, the tenant protection, is not achieved, ”said Schroeter to WirtschaftsWoche.
23 percent more condominiums built before 2014 are available for sale
The reduced number of rental apartments on offer naturally creates immense demand pressure, which has been rising sharply since February: In September, the number of contact inquiries on ImmoScout24 for properties built before 2014 was a full 172 percent compared to the contact inquiries in September 2019.
Of course, the apartments that are no longer rented are not empty. Instead, they are sold as condominiums – to people who, according to the experts, probably want to live in them themselves, as the returns on renting would not be worthwhile.
ImmoScout24 recorded an increase in the total supply of condominiums in Berlin by 13.2 percent – in the sector of existing properties built before 2014 by a full 23 percent, i.e. almost a quarter. Tenant protection does not exist to the extent that the government had hoped for: After all, not everyone can afford to own a home – especially since prices for condominiums in Berlin fell by 5.8 percent in September 2020 despite the growing supply, according to Immoscout24 Compared to the previous year (from an average of 4,788 euros to an average of 5,068 euros per square meter).
Immowelt: drifting apart on the housing market
Immowelt has also published a data analysis – and comes to figures similar to ImmoScout24. The platform was also able to observe that not only is there less free living space available for rent, but that there is also a significant price increase for rental properties built after 2014: Prices in the months of January to May 2020 were a full 17 percent above the price level of the previous year.
Prof. Dr. Ziegler, managing director of the real estate platform, is quoted as follows in the Immowelt press release: “Our fears have unfortunately come true: The rent cap is further exacerbating the divergence on the housing market.”
The corona crisis is not the cause of the numbers
By the way: “A look at the other top 7 metropolises in Germany shows that these effects are not caused by the corona pandemic or other influencing factors. [Dort] the range of residential properties on ImmoScout24 has increased significantly over the same period, ”says the ImmoScout24 analysis.
Overall, as of September this year, there are 35.3 percent more rental apartments on the market in these cities than in the same period of the previous year, and the number of available rental properties built before 2014 even increased by 38.5 percent.
The experts comment on the rent cap with disappointment – ImmoScout24 writes that it is “harder than ever” to find a rental apartment in Berlin and, according to the Immowelt press release, Ziegler says: “Politics should change […] rather concentrate on the creation of subsidized living space instead of putting private landlords into financial difficulties. “
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