German State Property Laws benefit real-estate investors – ‚OPP-Today‘

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Berlin Buildings on River – foto Next-Estate

German State Property Laws benefit real-estate investors

‚OPP-Today‘ published  an interesting article for those international investors presently owning or thinking of owning  property in Berlin, the German capital.  The article from the ‚Overseas Property Professional News Service‘ by Adrian Bishop entitled ‚How property laws are protecting Berlin real estate and benefiting investors‘, was published last month. It shows how the Berlin municipal and the German federal government want to both promote and protect the local real estate market.

OPP (Overseas Property Professional) is a global business information and media group.  The company provides essential news, information, insight, data and connections for businesses in the international property sector.

The local government of Berlin – which is a city-state and one of the 16 German Federal Lander – introduced rent controls last June thus preventing landlords charging new tenants more than 10% above the local average.

These rent controls are called ‘mietpreisbremse’ or “rental-brakes” and fixes a median rent price per sq/m for various city districts.

The article pointed out that this ‘protected area’ includes 160,000 households and affects circa 300,000 people, which out of a total population of 3.5 million is about 10%.

Any new rental contract is then not allowed to charge over 10% over this median set amount. Price increases for new rentals will remain possible, however the increases, when they come, will happen far more slowly.

The article highlighted the fact that Berlin attracts property investors from all over the world – the US, UK, and recently Chinese buyers are attracted to the still relatively inexpensive asset and development opportunities.

Strong demand for student apartment investment in Berlin Mitte, Prenzlauer Berg and Friedrichshain-Kreuzberg

Mention is made of the strong demand for ’student apartment investment‘ in the popular Berlin districts of Berlin Mitte, Prenzlauer Berg and Friedrichshain-Kreuzberg, are proving to be affordable investment opportunities.

This all because Berlin is becoming a start-up mecca for technology, media and telecom start-ups.