With the publication of the so-called Rent Limitation Ordinance, the price brake comes into force in the country’s two largest cities. From then on, the rents agreed at the beginning of a new tenancy in Dresden and Leipzig may be a maximum of ten percent above the local comparative rent (according to the rent index). However, this does not apply to new buildings and also not to the first occupancy of old buildings after extensive renovation. Even if higher rents have already been paid for the apartment, the instrument does not work. The rental price brake is to be limited to 2025.
The introduction of the rental price brake was agreed in the coalition agreement in 2019. The regulation is intended to prevent above-average increases in rental prices for new rentals in tight housing markets.
In June 2020, the Saxon cabinet had already extended the regulation on the lowered cap until June 30, 2025. Rents in existing tenancies in Dresden and Leipzig may only be increased by a maximum of 15 percent within three years. This regulation was also agreed in the coalition agreement.
“People are throwing sand in their eyes”
The criticism from real estate associations of the rental price brake could hardly be sharper. Tenor: The vacancy rate is also increasing again in the big cities, which is why the rent level in Saxony is moderate and, above all, is not due to the increase in cold rents but to the extreme rise in energy prices, which is socially explosive. „With this instrument, which is completely out of date, you don’t tackle the real price drivers in housing costs at all, but throw sand in people’s eyes,” criticizes Rainer Seifert, Association Director of the vdw Sachsen. “The massive problem for tenant households is currently not the cold rent, but the ancillary costs.”
A look at the annual statistics of the vdw Sachsen for 2021 shows that the vacancy rate in the metropolises has not fallen, but has risen by 0.5 percentage points to 5.5 percent. There can be no question of a sharp rise in rents: the average net rent without heating has risen in the large cities from EUR 5.77 to EUR 5.88 within a year. For Saxony as a whole, the average basic rent in 2021 was 5.36 euros (2020: 5.27 euros). “The member companies of the vdw Sachsen have thus continued to keep the basic rent more or less stable,” explains association director Seifert for the segment of non-profit housing companies.
“Vacancy in Dresden is increasing”
The Association of Saxon Housing Companies (VSWG) had already stated in its annual report for 2021 in mid-May that the vacancy rate was developing dynamically and at the end of 2021 had reached a rate of 8.7 percent (equivalent to 25,929 apartments). “Expressed in absolute figures, this means that 1,164 more apartments are vacant than in the previous year. It is striking that vacancies are increasing almost across the board. Only the city of Leipzig and the old districts of Görlitz and Freiberg were able to reduce their vacancy rate. All other regions – including the cities of Dresden and Chemnitz – saw increases in 2021.”
Haus & Grund Sachsen, as an association of private small landlords, declared: „With average rents of less than 7 euros per square meter, Leipzig and Dresden cannot be compared with Munich, Frankfurt or Stuttgart”.
“We need an energy price brake”
„What explodes for the tenants is not the cold rent, but the ancillary costs,” criticizes vdw director Rainer Seifert. The exorbitant price increase for electricity and heat, for which the housing industry is not responsible, is currently the greatest threat to the affordability of housing. “A rental price brake aimed at cold rents does not change anything,” Rainer Seifert clearly criticizes. Instead, it could happen that in some regions the ancillary costs will soon overtake the cold rent. If we want to keep housing affordable, we don’t need a rent price brake, but an energy price brake!” As a first step, the vdw Sachsen proposes the immediate temporary suspension of the CO2tax because this levy artificially increases energy costs even further.
Only Munich has higher heating costs than Dresden
The rental portal Immowelt had already published data on the rising ancillary costs in March. According to this, tenants in Dresden had to pay the second highest amounts for heating after Munich. The analysis by Immowelt dates from 2021 and refers to the 14 largest cities in Germany. On average, residents of a family-friendly 90 square meter apartment would have to spend up to 117 euros per month just for heating. The inhabitants of Munich would have to dig deep into their wallets for a warm apartment: the median heating costs for 90 square meters were 117 euros – the rent including heating therefore amounts to 1,764 euros. In Dresden, 108 euros would be due in heating costs. This is the second highest value in the study. Due to the significantly lower basic rent, the total costs of 801 euros would be significantly lower than in the Bavarian state capital. (Red.)
