The rent freeze in Germany will be extended until the end of 2029 and retained as a measure to limit rental costs in tight housing markets. The regulation stipulates that rents for new lettings may not be more than ten percent above the local comparative rent.
Despite the extension of the rent freeze, real estate industry associations are expressing criticism. They fear that the continuous regulation of rents could inhibit new investment in residential construction. In particular, they warn of potential negative effects on the construction industry if additional tightening of the rent freeze is introduced.
The criticism is based on the view that the rent freeze in its current form does not sufficiently promote housing construction and lacks the urgently needed incentives for the construction of new housing. An effective solution would require improved approval procedures and the provision of sufficient building land in order to sustainably stimulate the housing market.
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