One Year of the Rent Cap: How Has the Berlin Real Estate Market Developed?

One year after the Berlin rent cap came into force, it has led to a bifurcation of the Berlin real estate market. This is shown by an analysis of data from the real estate portal immowelt.de. Berlin rent and purchase prices in the regulated segment have developed more weakly since the rent cap came into force than in a control group, which includes all other major German cities with more than 500,000 inhabitants. Purchase price growth rates in Berlin, for example, have been 5–9 percentage points below the control group since the third quarter of 2020. By contrast, rental and purchase prices in the unregulated segment of Berlin have recently risen more strongly than in the control group. The decline in the number of rental advertisements in the regulated segment is an indication that the rent cap has reduced the supply of available rental housing in Berlin. The decline in house price growth documents the losses caused by the rent cap for apartment owners.