Implementation of the rent cap could have a
significant negative impact on returns for investors in Berlin
residential investments—will it be
challenged?
Over the past decade, Berlin has experienced a significant rent
increase for residential space. The Berlin government has now
adopted a position paper summarizing a proposal on a rent cap to
stop this rent increase. Draft legislation is scheduled to be
publicly available by mid-October 2019. If the rent cap is
implemented, investors in Berlin residential investments could
experience a significant negative impact on their returns.
Impact of the Rent Cap
For five-year period beginning on June 18, 2019, an increase of
rents for apartments on the nonregulated rental market will not be
permitted. The government reserves the right to extend the term if
sufficient affordable residential space is not available after the
expiration of this initial term.
