Economy

After the end of the Berlin rent cap: more apartments but higher rents


Apartments in front of the Berlin TV tower. The Federal Constitutional Court published its decision on the controversial Berlin rent cap on Thursday morning (April 15, 2021).
Apartments in front of the Berlin TV tower. The Federal Constitutional Court published its decision on the controversial Berlin rent cap on Thursday morning (April 15, 2021).
picture alliance / dpa | Fabian Sommer

It has been almost three weeks since the Federal Constitutional Court tipped the Berlin rent cap. That seems to be stimulating the Berlin housing market again: Since the judgment, 8.6 percent more rental apartments have been advertised in Berlin at the beginning of May, as the current housing barometer of the Immoscout24 platform shows. At times, the supply of rental apartments with completion before 2014 even increased by up to 20.5 percent.

Although there are significantly more offers again, the rents are also increasing: the asking rents for the segment that was previously relevant to the rent cap and were built before 2014 have risen by an average of 90 cents per square meter since April 15. This corresponds to a price adjustment of seven percent.

The real estate portal Immowelt assumes that asking rents for existing apartments will increase by eleven percent by the end of 2021. The rental price is currently nine euros per square meter, and next January it will probably be ten euros.

The prices rose the most for new apartments

For new apartments, the prices in Berlin increased by 3.5 percent compared to the other metropolises the most. For the federal capital, the Immoscout24 residential barometer also recorded the highest demand in this segment. For the next 12 months, the real estate experts forecast further rent increases of up to 5.6 percent in new buildings.

On April 15, 2021, the Federal Constitutional Court declared the law to limit rent in housing in Berlin, the so-called rent cap, to be unconstitutional. Several landlords and investors had previously sued the law of the Berlin Senate.

“It is good that Berlin finally has legal certainty again thanks to the current ruling by the Federal Constitutional Court,” says Immoscout24 managing director Thomas Schroeter. He hopes that the supply of existing rental apartments will now recover. The experts at the online portal are already seeing the first tendencies just three weeks after the decision has been made.

Immoscout24 also points out, however, that the increase is based on a low three-digit number of advertisements and is not yet a sustainable trend. How the end of the rent cap will have a lasting impact on the Berlin housing market cannot yet be foreseen in the long term.

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