Abstract - We find rent decreases accompanied by decreases in supply five times as large. We further investigate spillover effects on the purchase market, regionally heterogeneous effects as well as different effects by dwelling characteristics. We find the rent freeze did not have spillover effects on dwellings for sale which point to a ‘wait-and-see-attitude’ on the investors’ side. We make use of a rich dataset of real estate advertisements and employ hedonic difference-in-difference and triple-difference estimation strategies.
> We find rent decreases accompanied by decreases in supply five times as large.
If you want something completely FUBAR, you can always trust your local German bureaucrats to do a good job at it, especially in Berlin.
I wonder why they haven't tried increasing building supply and limiting external illegal immigration first? Also, why haven't they tried preventing these tax dodging stock market listed real estate mega conglomerates from owing a large proportion of the housing stock, as for them it's an investment for rent seeking that must make a return for their shareholders, rather than just shelter for someone. Crazy that Germans/Berliners let this happened yet see no issue with this and instead though that artificially capping rents was somehow magically gonna fix this. I guess most citizens don't really grasp the function of the housing market or the economics of it and instead will just vote for a quick handout. "Give them bread and games."
Exactly. People actually argue against increasing housing stock, or building new apartment. They say only new luxury apartments are being built. What do they want, that the builders build old rickety apartments with standards from the 1960s? Any apartment with decent construction is lambasted as being luxury, when a large part of the standards comes from the government itself - they would not give a permit for an apartment to be constructed to 1960 standards in terms of energy efficiency and insulation, windows etc.
When the government is extremely picky about how many permits to give, it is no surprise that only expensive apartments are built first.
Relevant:
Supply side effects of the Berlin rent freeze
Abstract - We find rent decreases accompanied by decreases in supply five times as large. We further investigate spillover effects on the purchase market, regionally heterogeneous effects as well as different effects by dwelling characteristics. We find the rent freeze did not have spillover effects on dwellings for sale which point to a ‘wait-and-see-attitude’ on the investors’ side. We make use of a rich dataset of real estate advertisements and employ hedonic difference-in-difference and triple-difference estimation strategies.