Berlin "Mietendeckel" Is A Rent Freeze And A Rent Cap - What Happens When?

The now worldwide infamous "Mietendeckel" under observation by many big cities with housing issues has various aspects to it coming into effect at different times. There is also a differentiation between re-letting and existing contracts. I will give the collection of regulations some structure, later on adding a timeline to it.

	Rent Freeze	Rent Cap
Re-Renting	Rent on 18 June 2019 maximum but possibly restricted by the rent cap table	Rent Cap Table for any contract after the publication date of the law in the Journal of Laws and Ordinances for the State of Berlin Amtsblatt 1)
Existing Contracts	Rent on 18 June 2019 maximum but possibly restricted by the rent cap table. The landlord must actively inform the tenant about the “correct” rent defined by either the date above of the rent cap, whichever is lower. 2)	The rent cap requires a rent reduction by the landlord if the current rent exceeds the rent derived from the cap table by >20%. This action has to happen 9 months after the publication. 3)

1) Before the publication, there is no actual restriction except that rents exceeding the cap table by more than 20% will have to be reduced later.
2) As of 1 January 2022, the rent cap table will be subject to an annual review based on the percentage inflation determined by the Federal Statistics Office as of 31 December of the previous year but limited to 1.3%. The Senate department responsible for housing must define the relevant percentage by way of a legal order.
3) For more details about the cap table see https://germanproperties.blogspot.com/2020/01/the-berlin-rent-cap-mietendeckel-is.html

Applying the cap table and assuming the highest possible value of 9,80 €/m²/month with 0,74 € for a good location and 1,00 € bonus for top equipment and being completed between 2003 and 2013  your top rent is 11,54. Add 20% before it is deemed excessive by the "Mietendeckel" you end up at

13,85 €/m²/month. This is the Maximum!

It does not matter, whether the apartment is furnished or not, if it is older than 2014 this is the maximum rent you can possibly have. There is a time-line to be observed. I will publish a separate post on this subject. One very short time-line applies to current vacancies. For details on this matter please see https://germanproperties.blogspot.com/2020/02/action-required-you-can-optimize-your.html urgently.

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Berlin "Mietendeckel" Is A Rent Freeze And A Rent Cap - What Happens When?

Have You Recently Bought a Condominium Apartment in Berlin?

Many international investors have bought condominium apartments in Berlin during the last years. Some will have full-service packages taking care of everything, hoping that everything will be alright. Some have bought an apartment, maybe even coming personally for the handover, proudly looking at their apartment - but what now?

Photo by All Bong on Unsplash

Just a few points to be thought of, best done a few months before:

• Who makes sure that any snagging is done right and timely while you are back home?
• How serious will the developer be when his last payment depends on the tick in the box on snagging - do you trust him to be acting in your best interest without supervision?
• Who holds the keys?
• At what rent should the property be rented - or should it be rented furnished with short-term contracts?
• If you want to go down the "Furnished Apartment" road, who takes care of this and who does the marketing for it?
• Who manages your apartment and rent collection, including
  
  • Budgeting
  • rent collection incl. chasing if necessary
  • payment of contributions to the owners association
  • property tax payment (quarterly)
  • tax documentation and handover to tax consultant in Germany
  • representation at annual owners meetings

Critical Point in Your Investment

This is the point in your investment that is as important as the purchase contract. The purchase contract and all the brochures are a promise. Now it comes to the fulfilment of your expectations - don't leave it to the developer and the agent who received a healthy commission - either from you or the developer - to make sure your plans work out. Even more important if reality does not meet brochure - you want someone on your side who knows the game. It also is a critical point for reclaiming some of the money you paid for a promise that was not 100% fulfilled - the clock starts ticking on handover day.

Our recommendation

Be prepared, don't leave it until the last day. But even if your handover has already happened and you are in the midst of having to make decisions by the minute - get some professional support with local experience. Someone with broad knowledge, experience and solutions. Everybody can point out problems, the next step is much more important - what to do? You don't need a lawyer, an architect and a rental agent to identify your next steps, you need someone who "owns" and "lives" your property and then proposes other specialists when needed and with specific tasks. Otherwise, you are likely to receive long documents with lots of possible or even real issues attached to a big fee account and still no solution.

We don't offer off the shelf solutions because every investor has a personal view about the degree of their own involvement. We can go from one-stop-shop including the management of the investment to just the production of a checklist based on the contract and its documentation. We are happy to engage in a conversation to find out what you feel is best for you.

Have You Recently Bought a Condominium Apartment in Berlin?

The New Lifestyle Center of Berlin-Mitte

Chausseestrasse at the north end of Friedrichstrasse in Berlin-Mitte is the new Lifestyle Center of the city.

The immediate environment is developing fast. Every visit brings new discoveries, a new espresso bar, a new restaurant, a hidden away well-established restaurant or the new bio-supermarket. There are attractions like the climbing garden “Mountmitte", the Natural History Museum and others at nearby Invalidenstrasse. For art lovers, the contemporary arts gallery at the “Hamburger Bahnhof” – is within a few minutes walking distance.
Looking at an aerial view, the amount of interspersed green areas become apparent. Bigger parks like Humboldhain or Tiergarten are within comfortable jogging distance. Pankepark and the Park am Hauptbahnhof (currently under development) surround the vicinity of  Chaussestrasse.

The company offices, some of them Germany headquarters, and federal ministries in the area are numerous. A few examples: Deutsche Bahn AG (3,000 office jobs), Vattenfall, Total, Bayer-Schering Pharma, Charité (University Hospital w. 3,800 doctors and scientists).  Federal Ministry (FM) of Transport, Building and Urban Development, FM of Economics and Technology, FM of Education
 
Currently there are several interesting property developments in construction or planned. There is "The Mile", "The Garden Living" and of course Daniel Liebeskind’s prestigious "Sapphire" project, with still more opportunities to come. For an interested buyer, especially living far away, it is a tedious task to follow all the developments, get brochures from all kind of agents and developers and at the same time know what is real and what is "pie in the sky" and might never be built. To help in those situations, there is a service available which provides an independent one-stop-shop for Luxury Condos in Berlin, especially in the central areas.

Sign up for information updates at condos.city-of-berlin.com

The New Lifestyle Center of Berlin-Mitte

City of Berlin has extended protection of condo tenants to 10 years.

The Berlin City Government has signed off a new regulation today starting 1. October 2013 protecting current tenants of a property newly divided into condos from being given notice for the purpose of own use for a period of 10 years after the division. This new act replaces the last 2011 regulation which only covered 6 districts and 7 years whereas the new one applies throughout the city.

This protection is for the residents at the precise moment of the division only. In case of new rentals the new tenants should be made aware of the fact that their new home is actually a rented condo, buy-to-let apartment or investment apartment as they are called as well. There is no influence on rent levels, contract durations or any other contract matter through this regulation.

The purpose of this act is said to address issues of so called "gentrification" in popular central locations and the impact of current short supply of affordable (low rent) apartments on the rent level inthe city.

For support in the identification of the right investment targets please visit our website at www.berlin-portfolio.com. Especially for international Private Investors and Property Funds we provide a task force service for quick reaction to interesting opportunities. We provide independent support for the property search including foreclosure or auction properties and their valuation or appraisal. (Also see our free property market Research Service) Please use this link to the contact facilities provided there to place any requests .
Uwe Falkenberg 

City of Berlin has extended protection of condo tenants to 10 years.

Properties-in-Berlin.com Relaunch

Our sister website Properties-in-Berlin.com is currently relaunched. The site serves as a portal for a network of property agents specifically targeted at international investors. It provides all information in English.

A new product section is now included: Villas.


The other sections are Single Apartments either vacant as Condos or rented as Investment Apartments.

Retail and office buildings in Commercial Properties

 Residential Investment Properties

And some specialised topics like Development Properties and building plots.

The listings are currently uploaded and will be kept updated.

The aim is to provide information and a network of professionals needed in the process of buying a property in Berlin: Tax consultant, bulding surveyor, solicitor, Notary public and finance.

Properties-in-Berlin.com Relaunch

Berlin Area Residential Market Turnover Shrunk by 36%

The apartment market turnover in the Berlin region shrunk massively in 2008 compared to the previous year. The total number of purchases fell to 21,600 that is a slump of 11%. In financial figures the turnover shrunk by 36% to €5.2bn. The figure for the turnover built property in Berlin was reduced by 48% and almost halved.

BBU, an association of Berlin-Brandenburg apartment firms operates a regular market monitor which showed these results. In some of the boroughs (Bezirk) in the western part of the city, the price level for old buildings with comfort features dropped from 14 to 13 times the annual rent—in some boroughs in the east, from 17 to 15 times.

At the same time, price increases were observed for condominiums in Berlin. During the coming five years, BBU is expecting an increase in demand primarily for housing in single and semidetached houses in Berlin.
Berlin will remain a predominantly rented and not owned residential market. In the market for rental apartments primarily small and large apartments will be in demand, while there will be an excess of 30,000 medium-sized apartments the report states in its outlook up to 2014.

For support in the identification of the right investment targets please visit our website at www.berlin-portfolio.com. Especially for international Private Investors and Property Funds we provide a task force service for quick reaction to interesting opportunities.

We provide independent support for the property search including foreclosure or auction properties and their valuation or appraisal. (Also see our free property market Research Service)

Please use this link to the contact facilities provided there to place any requests .

Uwe Falkenberg

Berlin Area Residential Market Turnover Shrunk by 36%

Price Development for Properties in Berlin 2009

The German broker's association IVD came to interesting results in their latest market report for the Berlin-Brandenburg metropolitan region.

The price development for apartments in Berlin recently is spreading according to location. This spread applies both to purchase prices as well as rent.

Purchase prices and rents at the low end of the market and in medium locations fell slightly, they remained bullish in good and very good residential and commercial locations. Purchase prices for apartments in standard residential locations stabilised at €1,200/sqm, while sellers in choice locations were able to demand €1,600/sqm on average – some 3.5% more than during the same period last year.

Similar developments can also be observed in retail and office rents. While top locations in city centers were able to raise rents, facilities at the outskirts are still under pressure. Tauentzienstrasse, at €230.00/sqm, has the highest rent for retail. For office and doctors’ office space, current peak rent is €21.00/sqm.

For support in the identification of the right investment targets please visit our website at www.berlin-portfolio.com. Especially for international Private Investors and Property Funds we provide a task force service for quick reaction to interesting opportunities.

We provide independent support for the property search including foreclosure or auction properties and their valuation or appraisal. (Also see our free property market Research Service)

Please use this link to the contact facilities provided there to place any requests .

Uwe Falkenberg

Price Development for Properties in Berlin 2009

Further Reduction in New Built Apartments in Berlin 2009

After a sharp drop in new built apartments in Berlin and Brandenburg in 2008 numbers for building permits have gone down even more. During the first six months of 2009 only 1,335 building permits for residential and non residential projects were issued. Another drop by 17,7 % compared to the same period of the previous year.

These building permits include 2.571 new apartments mostly in Pankow, Friedrichhain-Kreuzberg and Treptow-Köpenick, another 20% below the previous year.

In Brandenburg, the state surrounding Berlin, the reduction was "only" 6.5 %.

With Berlin attracting more and more businesses and maturing in its role as capital 20 years after the wall fell and 15 years after the move of the "Bundestag" (German parliament) this development in reduced new production of housing due to the credit crunch will put an upward pressure on existing rents.

It is time to get into this Berlin property market!

For support in the identification of the right investment targets please visit our website at www.berlin-portfolio.com. Especially for international Private Investors and Property Funds we provide a task force service for quick reaction to interesting opportunities.

We provide independent support for the property search including foreclosure or auction properties and their valuation or appraisal. (Also see our free property market Research Service)

Please use this link to the contact facilities provided there to place any requests .

Uwe Falkenberg

Further Reduction in New Built Apartments in Berlin 2009

Six Berlin Housing Projects Declared World Heritage Sites

UNESCO has included 6 Berlin housing estates in its World Heritage List. The projects were built in the 1920s and 1930s. They had model model character for social housing with vastly improved living conditions for tenants at the low end of the income scale.

The ideas had impact on the development of social housing in many other coutries.

Avant-garde architects like Bruno Taut, Martin Wagner, Walter Gropius and Hans Scharoun were building some of the world's first modern apartments with kitchens, bathrooms, balconies and sufficient windows to provide light and fresh air.

More details at DW - World, Deutsche Welle

Some of these apartments are available for property investors. To get listings and detailed information please refer to Properties in Berlin

Six Berlin Housing Projects Declared World Heritage Sites

Abu Dhabi investors buy into Berlin City West

( dpa )- First it was Potsdamer Platz which was redeveloped, after the communist Berlin Wall was cleared off it.

Now, it is the turn of the heart of former West Berlin, near the war-ruined Memorial Church and Zoo Railway Station, to attract international investors.

Abu Dhabi and other emirates investors plan to plough millions of euros into a major revamp of what used to be the central business district of West Berlin in the bad old days of division.

Architects are planning a spate of new buildings around the Zoo Station and the high-rise Europa Centre shop and office complex nearby, and along a shopping stretch near the modern, blue-glazed Memorial Church.

As it is, Berlin's skyline is already set to change dramatically with construction later this year of a spectacular 120-million-euro (175-million-dollar) Giant Wheel, Europe's biggest Ferris wheel.

Although long-distance trains no longer halt at the Zoo station - they stop instead at the capital's new Hauptbahnhof station - a scheme to modernize the run-down station complex and other buildings in the vicinity is now programmed.

The Harvest investment group from the United Arab Emirates will be spending up to 200 million euros on a development, the Zoo Fenster , across the way from the Memorial Church.

The church, a popular stop with tourists, is a Lutheran church shattered during the Second World War onslaught on Berlin and rebuilt incorporating some of the ruins as a dark reminder of the evils of war.

The church is in the headlines, with campaigners seeking to raise 3.5 million euros for urgent repairs to its crumbling tower. Berlin's city government has promised 1.5 million euros towards the bill.

The high point of the Zoo Fenster project will be a 120-meter-high skyscraper. A premium hotel is also planned by 2010.

Important Abu Dhabi investors involved in the project predict a dramatic increase in commercial property values in the western downtown districts of Charlottenburg and Wilmersdorf in the coming years.

In a separate development, there are plans for the city's Schimmelpfeng Haus , a building built over the Kantstrasse , to be replaced by a 120-metre-high hotel, office and business complex, a brainchild of Casia Property Management

All told, an estimated 1 billion euros is being spent on the "City West" renewal project, including 300 million euros devoted to projects around the Zoo Bogen building estate.

As part of the revamp operations, the Budapester Strasse traffic tunnel near the city's Breitscheid Platz has been filled in, repaved and plastered, giving visitors easier access to the city's familiar high-rise Europa Centre shopping-residential complex.

It is here that Europa Centre operator Christian Pepper has spent 60 million euros modernizing the popular shopping haunt.

Investor interest close to the Kurfuerstendamm , Berlin's most prestigious shopping strip, is helping boost business confidence throughout the city's central Charlottenburg and Wilmersdorf districts.

For a period after the city's 1989 reunification, the Kurfuerstendamm appeared set to lose out, as a host of cinemas, theatres and restaurants went out of business.

The Kurfuerstendamm - Kudamm for short - still glittered at night but much of its old flavour and tang had dimmed in the 1990s, as talk focussed on the east with the reinvented Potsdamer Platz , the new Friedrichstrasse shopping malls, and the revival of the communist-era hub, Alexander Platz .

Now, that is less the case. The Kudamm has recovered much of its old glamour and assertiveness in the past three years, as new high-end shops open and its pavement cafes, restaurants and pubs win renewed popularity.

"The Kudamm is very much back in the frame, popular with Berliners and foreigners alike," say Berlin's mayor Klaus Wowereit , who now lives in an apartment overlooking the boulevard.

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One way to participate in this development is through Investment Apartments in the districts of Charlottenburg and Wilmerdorf. Currently there are offers in these areas available at:
www.city-of-berlin.info/InvestmentApartments

Abu Dhabi investors buy into Berlin City West

Property as subsidised Pension Plan in Germany adopted by the cabinet

The cabinet of the German Federal Government has adopted a draft which allows up to 75% of a subsidised pension scheme to be used for the purchase of a property for own use.

With Germany having a high quota of rented accommodation, in Berlin ca. 85%, this option will open a vast market as exit strategy for real estate investors. Details, especially taxation are still to be finalised.

Property as subsidised Pension Plan in Germany adopted by the cabinet