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Berlin rents drop as price controls take effect

Tom Barfield · 8 Jul 2015, 14:50

Published: 08 Jul 2015 14:50 GMT+02:00

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“In other big cities marked by high-pressure rental markets that don't have a price brake, rents are rising still further,” Jan Hebecker of property search site immobilienscout24 told the Frankfurter Allgemeine Zeitung.

Rents in Frankfurt rose by 0.1 percent over the same period, while they held steady in Düsseldorf and sank by 0.1 percent in Munich.

“We can't say based on this one month when asking prices have fallen exactly why it's happened,” Wibke Werner of the Berlin Tenants' Association (Berliner Mieterverein) told The Local.

“There seems to be a connection from our point of view, but we'll wait and see what later analysis shows.”

But Werner added that it was unlikely to be a one-off effect from last-minute rent increases by landlords in the weeks and months before the introduction of rent controls.

“I don't believe that rents were seriously increased in the months before, but rather over the preceding four years,” she said.

Hebecker hopes to compile figures for the impact of the price brake on different city districts when more data is available in a few months' time.

Immobilienscout collects prices every month to analyze developments in rental markets across Germany, coming up with a median price per square metre of living space.

Finding the median – the middle value when all the data points are listed in ascending order - is intended to cancel out the effect of outlying figures which can skew a normal average calculation.

Even when calculating the mean, rather than the median, Hebecker found that Berlin's average price per square metre fell by 1.8 percent.

That's a stark contrast to the usual pattern in Berlin over the last year and a half, which had seen asking prices for rental apartments rise by around 0.3 percent per month.

The capital's price brake was introduced under a new nationwide law allowing local governments to designate areas where there is high upward pressure on rental prices.

Story continues below…

It means that landlords can't sign new rental contracts at prices more than 10 percent higher than the local average.

Hamburg and North Rhine-Westphalia have followed Berlin's lead in introducing the brake, with Bavaria and Rhineland-Palatinate soon to follow.

But each state will only designate certain areas to be affected by the measure, where Berlin politicians decided to apply it to the whole city.

SEE ALSO: Berlin jumps ahead on new rent control law

For more news from Germany, join us on Facebook and Twitter.

Tom Barfield (tom.barfield@thelocal.com)

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