This is going to make the German people poorer, and many will not be able to live in Berlin.
Berlin's renters face more misery as housing crisis deepens
On Berlin's broad avenues, posters put up by desperate would-be tenants seeking accommodation have become a common sight. Home viewings draw long lines of hopefuls, despite rent rises that have far outstripped salaries in recent years.
The German capital, where cheap and abundant apartments were a magnet for artists and young professionals as recently as a decade ago, now has a vacancy rate of less than 1%. The cost and difficulty of renting is making it hard to attract talent and forcing some residents to leave, even though businesses are desperate for skilled labour.
Rolf Buch, chief executive of Vonovia, Europe's largest landlord, cited record-high interest rates and rent controls as factors responsible for the mismatch between housing supply and demand.
As Europe's largest economy teeters near recession, economists warn that high rents will feed inflation and reduce household consumption.
About 85% of Berliners rent their homes, far more than the 53% for Germany as a whole, and the 30% average within the European Union.
In 2004, the City of Berlin sold its indebted GSW social housing unit and more than 65,000 apartments, many vacant or needing renovation, to Goldman Sachs and private equity firm Cerberus.
The city's population started growing again in 2005, as birth rates and life expectancy rose and migration increased. Foreigners now make up 24% of residents, their numbers having almost doubled between 2011 and 2023, Berlin statistics office data shows.
A German law that limits how often a landlord can increase prices keeps rents low for long-term tenants compared with new arrivals and gives them little incentive to move.
Berlin's renters face more misery as housing crisis deepens, Maria Martinez and Riham Alkousaa, Reuters, November 15, 2023
Highrise housing projects in Germany going bankrupt (posted in Economics & Capitalism section)
Germany begins to struggle taking in more migrants (posted in Europe section)