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Real Estate

Around half of Germany's private assets are invested in real estate. The business with offices, houses and apartments has an impact on the economy as a whole. The real estate markets are also interesting for investors who are looking for safe investments in times of low interest rates.

About the topic

For many, building or buying their own home is the biggest investment of their lives. The need for information is correspondingly high. Many are asking themselves whether they should rather rent or buy and whether buying real estate in the big cities is still worthwhile. The Institute of the German Economy also closely examines the price development of real estate on the basis of various studies. For example, the IW Real Estate Index, the Home Ownership Report or the Student Housing Report regularly provide a detailed insight into various areas and aspects of the real estate market in Germany.

Housing policy is also analyzed in detail: Can instruments such as the rent brake or the rent cap achieve their intended goals? What are the side effects, and above all, are there better alternatives?

But real estate also plays a significant role in the fight against climate change. Buildings produce more than one-third of carbon dioxide emissions. Because modern houses require only a fraction of the energy of older buildings, energy-efficient renovation would make sense in many cases. But this costs money and only pays off after decades - possibly not in the lifetime of many investors, because more than half of German homeowners are over 60 years old. Politicians have recognized that owners need support.

German Economic Institute (IW) German Economic Institute (IW)

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Pekka Sagner / Michael Voigtländer in International Journal of Housing Policy External Publication 6. May 2022

Supply side effects of the Berlin rent freeze

On 23 February 2020, the Berlin Senate introduced the Berlin rent freeze (‘Mietendeckel’). The law was repealed on 25 March 2021. The Berlin rent freeze was an unprecedented market intervention in the German housing market.

IW

Read the article
An Analysis of the Current Risk Levels in Residential Real Estate Financing in Germany
Michael Voigtländer / Jonas Zdrzalek IW-Trends No. 1 14. April 2022

An Analysis of the Current Risk Levels in Residential Real Estate Financing in Germany

The German Federal Financial Supervisory Authority (BaFin) is keeping a watchful eye on the granting of housing mortgages and from 2023 on will require lending banks to increase their equity capital to cover potential risks.

IW

Read the article
Methodology and First Results
Christian Oberst / Michael Voigtländer IW-Trends No. 4 17. December 2021

A Hedonic Rental Price Index for Retail Properties in Germany

Despite their importance for users, investors and urban development, there is no appropriate monitoring of rent prices for retail properties in Germany. Comparing average rents alone is of limited benefit as the composition of location and quality properties ...

IW

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How the Berlin Rent Cap Affected Private Landlords
Pekka Sagner / Michael Voigtländer IW-Trends No. 3 20. August 2021

How the Berlin Rent Cap Affected Private Landlords

The effects of the Berlin rent cap on the city’s housing market were wide-reaching, with the supply of rental accommodation falling by more than half while the cap was in force.

IW

Our Experts

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Ralph Henger

Dr. Ralph Henger

Senior Economist für Wohnungspolitik und Immobilienökonomik

Tel: +49 221 4981-744
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Christian Oberst

Dr. Christian Oberst

Senior Economist for Housing Policy and Real Estate Economics

Tel: +49 221 4981-889
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Pekka Sagner

Pekka Sagner

Economist for Housing Policy and Real Estate Economics

Tel: +49 221 4981-881
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Michael Voigtländer

Prof. Dr. Michael Voigtländer

Head of the Research Unit Financial and Real Estate Markets

Tel: +49 221 4981-741
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Read study
Supply side effects of the Berlin rent freeze
External Publication 6. May 2022

Supply side effects of the Berlin rent freeze

Pekka Sagner / Michael Voigtländer in International Journal of Housing Policy

On 23 February 2020, the Berlin Senate introduced the Berlin rent freeze (‘Mietendeckel’). The law was repealed on 25 March 2021. The Berlin rent freeze was an unprecedented market intervention in the German housing market.

IW

Read study
An Analysis of the Current Risk Levels in Residential Real Estate Financing in Germany
IW-Trends No. 1 14. April 2022

An Analysis of the Current Risk Levels in Residential Real Estate Financing in Germany

Michael Voigtländer / Jonas Zdrzalek

The German Federal Financial Supervisory Authority (BaFin) is keeping a watchful eye on the granting of housing mortgages and from 2023 on will require lending banks to increase their equity capital to cover potential risks.

IW

Read study
Methodology and First Results
IW-Trends No. 4 17. December 2021

A Hedonic Rental Price Index for Retail Properties in Germany

Christian Oberst / Michael Voigtländer

Despite their importance for users, investors and urban development, there is no appropriate monitoring of rent prices for retail properties in Germany. Comparing average rents alone is of limited benefit as the composition of location and quality properties of observed retail objects could differ significantly.

IW

Read study
How the Berlin Rent Cap Affected Private Landlords
IW-Trends No. 3 20. August 2021

How the Berlin Rent Cap Affected Private Landlords

Pekka Sagner / Michael Voigtländer

The effects of the Berlin rent cap on the city’s housing market were wide-reaching, with the supply of rental accommodation falling by more than half while the cap was in force.

IW

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