Citizens of Berlin have voted for the expropriation of large housing companies. According to the German Institute for Economic Research, this could have unpleasant consequences for the housing market.
After the Berlin referendum on the expropriation of large housing companies, the President of the German Institute for Economic Research (DIW), Marcel Fratzscher, warned of the negative consequences for the housing market.
“Expropriations would not only be economically damaging, but they would be counterproductive with a view to the housing supply and rents,” he told the Funke media group.
Expropriations could lead to less housing construction
Even a limited risk of possible expropriations will increase the uncertainty on the part of investors and thus lead to a decline in residential construction in Berlin. Fratzscher: “Landlords will demand higher risk premiums so that long-term and short-term rents will rise even more sharply and the supply of apartments will be even tighter.”
In a referendum by the “Deutsche Wohnen & Co expropriate” initiative, the Berliners voted in favor of expropriating housing groups. The Association of Berlin-Brandenburg Housing Companies considers expropriations to be the wrong approach. The German Real Estate Association was also of the opinion that the goals of the referendum could not be incorporated into a law in a constitutional manner.
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
