U-turn regarding the Mietpreisbremse. In contrast to the previously announced examination of the Mietpreisbremse in the year 2020 during the exploratory negotiations, Angela Merkel`s CDU/CSU block and the left-leaning SPD have now decided to make the rent control legislation even more stringent. Landlords will now be required to disclose exactly how much rent previous tenants were paying to their new tenants. Additional changes, such as cutting the renovation costs landlords can pass on to tenants as well as the introduction of a build scheme for families with children remain unthematized. As the rent control legislation has previously been declared unconstitutional by the courts, representatives of the real estate industry characterize the new housing policy as purely symbolic.
Property Developer Aldi
The supermarket discounter Aldi is planning to build around 200 apartments above ist stores in Berlin. Two sites were already found for the project, several more are under examination. In total, Aldi aims to develop around 2.000 residential units at 30 sites in the capital. In light of Berlin`s heavy housing shortage, it should be easy for the supermarket discounter to gain building approvals for larger stores even in densely populated areas in the future. Aldi`s competitor Lidl is already testing similar projects at two stores in Prenzlauer Berg as well.
Victory over Short-term Rentals
7.868 apartments have already come back to Berlin`s regular rental housing market since the introduction of the ban on short-term vacation rentals in 2016. Following figures published by the city`s Senate administration, about half of these apartments were previously used as holiday apartments, the other half was vacant. The Senate is currently planning to legalize home-sharing, private holiday rentals, for up to 60 days a year.
Real Estate Yields on Record-Setting Levels
German real estate has never achieved such a high total return on investment as in the previous year since reunification. Following the preliminary figures of the German Property Index (GPI), the average yield in the residential, commercial, office and logistics sectors now stand at 19%. This figure still amounted to 16.1% in 2016.The highest total returns were achieved by rental apartments (24.1%) and offices (19.8%).
Greater Control of Bima
The Federal Council of Germany plans to put the Institute for Federal Real Estate under greater control. It has therefore launched a legislative initiative to amend national real estate policy to prevent “price gouging through bidding procedures for the sale of state-owned apartments“. However, these changes will only apply if municipalities or municipally-owned companies acquire state-owned real estate for the application as social or student housing. Municipal companies would then no longer be subject to the principle of economic viability and would no longer have to compete against private bidders on the open market. Bima is among Germany`s 15 largest housing owners with a total stock of 37.000 apartments.
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Your Accord Estates GmbH Team