12. September 2019

Interview with Berlin property lawyer and blogger Tobias Scheidacker

Black Label Properties recently interviewed Berlin property law specialist and regular commentator Tobias Schedacker on his views on recent developments in the Berlin property market. You can watch the original interview in German on our YouTube channel, but as we think his views are also of interest to our non-German speaking international clients, below is an English transcription:

BLP: How do you perceive the real estate situation in Berlin?

TS: Unusual! I started to get bored a while ago because for the last 15 years I basically have been doing the same things and giving the same advice as a tenancy law expert – and now with all the recent regulation changes, everything has gone crazy!

BLP: What has changed?

TS: We now have a large number of regulation changes in a short period of time and I get the impression that it is practically impossible for the market to cope with that. These have created a high amount of uncertainty.

BLP: Which regulation changes do you mean in particular?

TS: In 2015 we had the first rental „price brake“ which was tightened up again in January this year. The Senat is now discussing a „Mietendeckel“ (price ceiling), and in parallel the „Misuse of Housing“ law was introduced (often referred to as the „Airbnb ban) and also now tightened up several times. This makes for a lot of regulatory interventions in the Berlin property market.

BLP: What is the impact of these interventions?

TS: The first impact is a high level of uncertainty – nobody knows at the moment what is allowed, what is not allowed, what will be allowed and what the future economic conditions for property will be. Properties are subjects of long-term investment here and when you cannot calculate what the economic or legal situation in five, ten or 15 years will be – then this has implications now.

BLP: Do you have an example for these implications?

TS: For example, private owners do not rent out empty apartments long-term anymore but rather use them for other purposes like storing files or selling them. Also, people who now inherit property think about selling instead of renting. The question resulting from this is: Who is going to buy those properties? Not private people, they are also uncertain about buying apartments.

BLP: What can the administration do to improve the situation?

TS: I am generally a friend of the market. It is not the duty of the administration to dictate prices. According to my view, it is the duty of the administration to set basic conditions that allow a balanced market. This means all the regulations should be checked to see if they improve or worsen the situation. I think that there are many regulations which should be abolished.

BLP: How do you see the situation in five years time?

TS: That is very hard to say! I suspect that we will get a Mietendeckel Law, and I also suspect that this law will be revoked by the court. The federal government is planning to extend the rent price brake, which I suspect will further stress the market. Private owners will leave the market due to insecurity, which will increase pressure in the market, which may well result in the proportion of available apartments for rent decreasing from current levels.

BLP: How are investors reacting?

TS: At the moment the investors are hesitant to buy properties due to all the current insecurity.

BLP: What is your legal view on the Mietendeckel?

TS: I agree with the opinion of most of my collagues: The Berlin Senate has no legislative authority to introduce this law, so that a Mietendeckel would be unconstitutional and void.