Posted at 05.05.2021 | | in Berlin Real Estate Talk
22th Live Event | Meet the Expert
The Berlin Rental Market – An Analysis of Rental Prices in Berlin
Berlin, a city of tenants – The demand and thus the prices for apartments in Berlin have risen rapidly in recent years, and the housing situation is tense. Measures such as the “Mietenspiegel” (rent index), the “Mietpreisbremse” (rent brake) and, most recently, the failed “Mietendeckel” (rent cap) are intended to protect tenants. Are these measures effective? Yiannis Tzakris and Thomas Adam from our property management team will explain where rents currently stand for old and new apartments, how they will develop in the future, and how tenants can really be protected.
Experts in live conversation with Achim Amann:
Yiannis Tsakris, Managing Director at Black Label Property Management GmbH.
Thomas Adam, consultant at Black Label Property Management GmbH
Yiannis Tzakris is Managing Director at Black Label Property Management GmbH. After completing his bachelor’s degree in Urban Planning, Yiannis worked as an urban planner in a small private consultant’s office in Thessaloniki, Greece. He later moved to Berlin to take on new challenges and find a more stable professional environment. At Black Label Property Management he is responsible for letting and managing properties.
Thomas Adam is a trained freight forwarding and logistics services merchant and completed a degree in quality management. He worked in this field for eight years until he joined Black Label in search of new tasks and challenges. Here he works as a consultant for tenants and owners in Black Label Management GmbH.
More information on renting and management can be found at:
Berlin Property Rental Agency – Letting and Management
Summery of the interview:
As a property manager, how do you assess the current situation in the rental market?
The regulations from the “outside” and the associated uncertainty as we see and have seen with the rent cap and rent index are leading to a certain unrest on the market.
What are the classic types of apartments being offered right now?
The classic things that we offer are furnished rentals and often temporary rentals.
Why are there so many fixed-term leases?
On the one hand, the demand from tenants for fixed-term leases in Berlin is very high. For example, interested parties are only in the city for a certain period of time for work-related reasons and are therefore specifically looking for fixed-term leases. On the other hand, the landlord wants to have flexibility to use the apartment himself after a certain time, if necessary, or to re-let it for fear of losses due to the political regulations of the market.
If the rent of an apartment that has already been rented out is higher than the current rent index, can the price be continued at that level when the apartment is re-rented out?
Yes, it may. This is mainly due to the fact that the current rent index for Berlin is not qualified and therefore does not form an official basis for calculating the rent.
How does Black Label determine the purchase price of real estate and what role does rental income play in this?
We calculate the purchase prices of real estate with the help of different tools, such as Sprengnetter, Lora and Price Hubble. You can find more information about this, as well as our free online valuation tool, here. (https://blacklabel-properties.com/selling-property/property-valuation/).
However, there is a price difference between rented and non-rented properties. In the case of rented properties, the value is calculated using a so-called capitalized earnings value method. Here, factors such as rental income and location are taken into account to calculate the percentage return. In Berlin, we currently have average yields of 2-3% in 2021. For comparison, in Leipzig the yields are 4-5%.
Do you anticipate further increased political regulation?
A resounding yes. If you look at the party programs, especially those of the Left, the SPD and the Greens, you will find intentions of far-reaching regulation.