DIW boss: expropriations counterproductive for the housing market

Released on 28.09. 2021

  • Apartments in front of the Berlin TV tower. (Archive image). Photo: Fabian Sommer

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Berlin citizens 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.

Berlin (dpa) – 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 negative consequences for the housing market.

“Expropriations would not only be economically damaging, but they would be counterproductive in terms of housing supply and rents,” he told the Funke media group.

Expropriations could lead to less housing construction lead

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 initiative “Deutsche Wohnen & Co expropriate” for the expropriation of housing groups. The Association of Berlin-Brandenburg Housing Companies considers expropriations to be the wrong approach. The Real Estate Association of Germany was of the opinion that the goals of the referendum could not be cast into a law in accordance with the constitution.

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