The view from the outside

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German tenancy law from an international point of view

Of course, word has spread in the international environment that Germany has a restrictive tenancy law and currently a Mietendeckel is planned. For foreign prospective customers who, for example, move to Berlin and want to buy a condominium for this purpose, there are a number of questions. These include:

  • Which additional costs are to be expected with a purchase? What are the timings?
  • How useful is a purchase in Germany compared to a rental?
  • How difficult or easy is it to terminate leases to use the purchased apartment yourself?
  • Does it make sense in Germany to rent an apartment? Which framework conditions apply? What is the rental price brake and rental cover in practice?

Hypofriend GmbH provides mortgage loans for German real estate to foreign buyers and provides them with information in English on their website for orientation purposes. In this context, I was asked for an interview that I liked to give (here ).

Restrictive tenancy law prevents property formation.

An external perspective helps to recognize whether one's own perception is distorted and to correct it.

Here Already in the year 2016 I have shown that our German tenancy law is one of the reasons why the Germans have the lowest home ownership rate in Europe. In all other EU countries, the landlord - either at any time or after a few years - without notice terminate a tenancy. Even otherwise, the various rental laws are much less restrictive than ours. If you want to settle permanently or your peace, you have to buy.

Over the generations, this leads to growing property ownership and less dependence on fluctuations in the labor market. There is no need for laws on modernization and its levy, or on rent increases in the current contract. There is also no nuisance to sublet. As owners, people are less dependent on the state and its ongoing transfer payments. Because it is cheaper to own than to rent, they have more money to spend on other things. Less redistribution allows lower tax ratios, i.e. more gross than net for those who work.

Mietendeckel is unsocial and destroys cities.

In the world (here ) you could read recently what a 23 year-long rental cover in Geneva has caused. The existing tenants - that means those who were already tenants before 23 years - live in crumbling buildings cheap, all new entrants receive either no home or only at exorbitant prices outside the capped area.

The Wirtschaftswoche has also looked abroad (here ), from New York via Spain to Portugal. The experience was everywhere a shortage (because tenants no longer give up their capped housing), a misallocation (staying in the apartment despite changes in living conditions, such as removal of children, longer work distances, etc.), a decline in the building fabric and an impoverishment of the population, because the wealthy eventually moved away.

Foreign press has the world here collected. Mostly one notes again the economic inability of the Germans. Occasionally there are also positive comments, but these only from politics.

High rents in Berlin ?? Not really.

How overpriced is Berlin really? There is also a whole series of investigations on this question.

The mirror has here  a ranking of the 30 most expensive German cities. Berlin does not appear in it. The data from Statista (here If you want to play in the top German rental league, a square meter of living space should cost at least 12 Euro, better 14. Munich with its 18 Euro / sqm is still far away.

Once again, a look from abroad corrects our inner-German perspective: living in another European capital is significantly more expensive, Berlin is ranked 40 by 44. The Tagesspiegel has that here compiled. Paris leads the list (28 Euro / square meter), then come the Scandinavians (between 21 and 25 Euro / square meter). For comparison: the average of the Berlin rent index 2019 is 6,72 Euro / sqm and asking rents of 14 Euro / sqm are currently referred to in the public debate as usury.

Invest at the apartment level

For the construction of assets and passive income from real estate, especially one or more condominiums, I have written an ebook, you can find the link to Amazon here , If you prefer to keep it printed in your hand, you will find it here .

If you want to use your own property, you can cancel because of your own needs.

If you want to read about the topic of self-employment termination, you will find related blog articles under the following links. Of course you can also just commission me, then I will do everything for you as your lawyer.