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At the turn of the millennium Berlin was a metropolis with a very low cost of living. However, this changed in the last few years. As new residents arrived, demand for new housing rose, but the local developers could not satisfy it. The result? The prices of rentals started to rise at rocket speed. Affordable housing started to become an unreachable dream for a larger and larger number of Berliners.

The rising dissatisfaction climaxed with mass demonstrations. People even started to call for a referendum that would enable the confiscation of large owners’ apartments.

Berlin city hall decided to deal with the rising tension by putting a ceiling on rent for the next five years. Representatives make no secret of the fact that they intend the bill to be an example for the other federal lands. And, with regard to the fact that the prices of rented accommodation are the subject of passionate debates in Germany, it is possible that this will inspire other European countries. At the end of the day, the situation in Prague is markedly similar to that in Berlin.

The measure, which should come into force at the start of next year, will calm the situation for a temporary period. The real solution is, however, only to increase the supply of affordable housing. In order to accelerate construction, according to property experts it would be a good idea to amend building regulations. According to Katrin Lompscher, the councilor responsible for housing and urban development, however, representatives have not yet looked at plans to increase the supply of affordable housing.

The proposal by Berlin city hall was sharply criticized also by Andreas Mattner, president of the German real estate lobby ZIA. He regards putting a ceiling on rent as political failure by the city’s management. He is also worried about a weakening of the inflow of investment needed for new construction. According to him, in the future investors will think twice about whether to invest in Berlin or place their funds in projects in other cities.

Residents of other big German cities also have fears of a sharp increase in the costs of housing. In recent months, protests have also hit Frankfurt, Stuttgart and Cologne.

The amount of rent is, however, also a subject of public debates in Barcelona, Spain, where the costs of housing have risen to more than 50 % in recent years. Owners of properties in the most desirable quarters, however, will have to comply with binding comparative indicators when negotiating rent.

Amsterdam is also dealing with the affordability of housing. The city’s leadership is getting ready to prevent property speculation by issuing a regulation according to which buyers would have to live in a newly-acquired property themselves for at least three years. The Dutch minister of the interior is also preparing an act that would allow municipalities to determine the maximum amount of rent for new contracts.

Growing calls for rent regulation are starting to have a real impact in Germany. There was a fall in the share prices of German property companies on the Frankfurt stock exchange in connection with the Berlin proposal. Growth in rental prices is slowing down in comparison with previous years. The long-term influence of the new bill on the property market (not only) in Germany will, however, be assessed after some time passes.

And what situation do we expect in Prague? An attempt at regulation, in particular in municipal apartments, will certainly be a hot topic. Everything will depend on further trends in prices. Nevertheless, all owners of rental properties can remain calm. All rental contracts are in accordance with legislation.

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