Following the recent election in Berlin, which is expected to lead to a new Senate administration involving the Left Party (Die Linke), real estate sector players have taken a stance. Their assessments shed light on the possible consequences for the Berlin housing market and the general development of the metropolis. The analyses focus on the political direction and its implications for owners, investors, and urban development.
Uwe Bottermann, lawyer and partner at Bottermann::Khorrami, highlights the central role of the housing question in the context of the election outcome, which he considers understandable given the current situation in the housing market. He notes that housing construction apparently does not generate votes, while rent regulations are popular. According to Bottermann, this sends a fatal signal, as it strengthens inertial forces via a so-called lock-in effect, impedes inward migration and dynamic developments, and further increases regulatory pressure.
Strategic Direction of Housing Policy
Bottermann further explains that Berlin's housing policy is likely to continue aiming to block market influences as much as possible. As an example, he cites milieu protection, which conserves structural sub-standards to preserve the tenant structure. In doing so, ageing, fluctuation, and the resulting changes in housing needs are systematically ignored. He argues that Berlin does not need a class struggle and distribution conflict, but rather a consensus on the future direction of the city. The question is whether a reserve with low rents at the standard of the noughties is desired, or a capital city that is geared towards the needs of modern urban development and can compete with other metropolises.
An important topic for the coming weeks will be whether the socialisation of housing companies will be seriously pursued. Die Linke expresses a clear intention here. For the SPD, according to Bottermann, the existential question arises as to whether they will support this course, especially since the federal SPD currently intends to pass a law that would prohibit the socialisation of housing companies.
Investor Strategies in the Current Environment
Philip C. Hetzer, Managing Partner at DAHLER Invest, expresses the expectation that landlords in Berlin will hold back and reduce modernisations, hoping that the five-year legislative period will pass. He assesses the 'buy and hold' strategy for the coming years in Berlin as potentially successful, as the housing supply is unlikely to grow, while housing demand remains at a high level. This analysis indicates a continuation of tight market conditions, which could be influenced by political measures.
