Rent cap remains current: experts discuss the future of real estate

Rent cap remains current: experts discuss the future of real estate

A significant announcement about future rental price policy was made at the “Investment Expo” in Berlin on May 26, 2025. Annett Jura, head of the housing and real estate department in the Federal Ministry of Construction, reported on the planned extension of the rent cap, which is due to apply until the end of 2029, particularly in tight housing markets. This measure met with critical voices from the real estate industry, as emphasized by Aygül Özkan, general manager of the ZIA real estate association. She believes it is unrealistic to avert this extension. Michael Kießling, the CSU's political spokesman for construction in the Bundestag, and several industry representatives also took part in the discussion.

The event, which took place at the Zoo Palast, was well attended and had around 830 participants from the real estate industry. Expert talks included Lars P. Feld, professor of economic policy, and Christoph Heusgen, former chairman of the Munich Security Conference, who addressed the challenges of Germany's economic and security policy situation. The discussion was moderated by Aygül Özkan and reflected the current acute challenges facing the industry.

Details of the rent control

The rent brake is only part of an extensive coalition agreement that the CDU, CSU and SPD decided on April 9, 2025. This contract under the title “Responsibility for Germany” not only regulates the distribution of ministries, but also emphasizes important issues such as tenant protection and housing construction. Kießling expressed optimism about progress in construction, as an agreement with the SPD is said to already exist. However, he was skeptical about the new “building type E”, which allows different comfort features in order to reduce construction costs.

The coalition agreement consists of 146 pages and aims to strengthen tenant protection. Tightening of the cap limit and the state opening clause were removed. Stricter rules for index rents, furnished apartments and short-term rentals are also planned, as well as a reform of the modernization levy. The aim is to promote investment and ensure rent affordability. In addition, a group of experts is planned to develop proposals for the harmonization of rental law regulations by the end of 2026.

Outlook on building legislation

The implementation of the new “Building Type E”, which builds on preparatory work by the previous government, could be moved forward quickly. Jura promised that the coalition will build on the traffic light government's already advanced plans. However, it remains unclear whether Section 246e of the Building Code, intended to facilitate development planning procedures, will be passed before the summer break.

Another central point of the coalition agreement is the presentation of a bill for a “housing construction turbo” in the first 100 days of the government in order to reduce bureaucracy and create tax relief. The focus is on digitalization and modernizing urban development funding, the financial volume of which is to be doubled. Major changes are therefore imminent in building law and the housing industry.

Overall, the situation in Germany, particularly on the real estate market, shows the urgency of political measures. The coalition agreement and the announcements at the “Investment Expo” make it clear that both tenant protection and housing construction are at the top of the political agenda.

For more information, read posts from Cash Online and Haufe.