Interview with Christopher Zebitz

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Mr. Zebitz, you are the managing director of Zebitz & Heyden Real Estate GmbH, a Berlin family business. Your company has been brokering real estate for 30 years. How do you currently see the Berlin real estate market?

Over the last three years, we have seen a significant decrease in available investment real estate, which has been accompanied by sometimes extreme price increases. Only at the beginning of this year did we again see a slow decline in bid prices. In the area of ​​apartment letting we continue to observe rising prices, but a much lower tenant turnover than in previous years. Currently, the discussion of the planned rental cover seems to have led to a temporary calming of the market.

Specifically to Mietenteckel: has the impact on investment decisions of your customers? If yes, which?

Since the publication of the ruling on the introduction of a rental cover, we are again seeing rising supply numbers at more moderate prices, but our clients are exercising restraint. The discussion about the rental cover has led to a great deal of uncertainty. For example, ongoing transactions were canceled and scheduled appointments for the certification of land purchase agreements were canceled. The amount of incoming purchase offers has also fallen and we are seeing a decline of up to 800,00 € / m² compared to the first half of this year.

The rental price brake 2015 was already a clear regulatory intervention. Why are the current plans perceived so differently?

In the case of a breach of the rental price brakes, landlords have so far threatened only a complaint and adjustment to the legally permissible rent. However, the draft lease covers penalties up to 500.000 Euro. In addition, new rentals to 18. June 2019 be capped retroactively. Due to the exceptionally high sanction and planned unitary rents, many of our clients feel deprived of their contractual freedom. Some even claim that your belief in the rule of law and its laws is deeply shaken.

How does your company react?

We deviate from other market segments and deal for example with condominiums. Here we carry out the division of rental properties into condominiums for our customers and take over the distribution. Since the planned rented cover so far concerns only rental apartments, we also rent more commercial space. In close cooperation with our property management company, we can make a decisive contribution to property development. In addition, we now focus on the Berlin bacon belt, just that city-near area for which no rental cover is planned.

What is your perspective on environmental protection areas?

The classification of certain locations as a protected area and the issuance of conditions by the district (eg prohibition of floor plan changes) is partially incomprehensible. Who wants to shower in his kitchen today? We assume that Berlin will develop into a comprehensive environmental protection area, that the division into condominiums will become increasingly difficult and that the sale of condominiums will be more strictly regulated.

How do you expect the Berlin real estate market to develop over the next 5 years?

If the rental cover is introduced as planned, we expect an increase in housing shortage. Because of imminent rent reductions by low-income new tenants landlords will decide from now on only for the most solvent candidate. Due to lower rents Berlin will become even more interesting and the competition among apartment seekers will increase. Due to the scarce supply, we expect an increased demand for rental apartments in the surrounding area and, as a result, rising prices in Brandenburg. Whether this development will lead to an increase in demand for residential property remains to be seen. Finally, the limited modernization options will mean that existing buildings will only be maintained in a neglected way.

What would you say would be different?

New housing must finally be built, in a balanced ratio of privately financed and publicly funded housing. In addition, the inner city still has plenty of potential for re-compaction, the exploitation of which should be supported by building law and should not be hindered further. At least in the context of a peripheral development should be possible on the Tempelhofer field finally housing. Perhaps it is also time to seek external help, because Berlin's major projects seem to be chronically destined to fail.

Thank you, Mr. Zebitz, for taking the time to talk with me.

Thank you for allowing me to be here.