The Federal Cabinet has decided to extend the rent freeze. Whether the Bundestag will agree to this depends on further political developments in the new year. The rent freeze was actually intended to be a temporary solution. However, the tense situation on the housing market requires a political solution.
Federal Minister Klara Geywitz commented: "The Federal Cabinet's decision to extend the rent freeze is a necessary step to protect tenants. It must be extended as quickly as possible, because in many cities it will already expire in mid-2025."
The scope of application of the rent freeze is also to be extended to flats that are used and let for the first time after 1 October 2014 and up to 1 October 2019. These flats were previously exempt from the rent freeze.
According to the Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR), the rent freeze applies in 410 municipalities with around 25 million inhabitants and almost 9.5 million rental flats (as of July 2024). That is around 30 per cent of the population and 40 per cent of all rental flats in Germany.
The property industry associations have voiced numerous objections: extending the rent freeze would exacerbate the housing shortage, impair the investment climate and contribute to consolidating the crisis rather than solving it. The rent freeze should only be extended if parallel measures are taken to resolve the tight housing markets, e.g. by designating additional building land, utilising potential for redensification, increasing the number of staff in the building authorities and lowering the requirements for new construction.
In view of the fact that the number of new builds has been far too low for years and the growing population, the situation on the rental property market will not ease quickly. Anyone who urgently needs a new home should also look at the property purchase market. Financing conditions have improved significantly and prices are currently still moderate following the sharp fall in prices from 2022.
Photo / Graphic: © PeterBe, Pixabay
