Neukölln has been exercising the right of first refusal for the first time since November 2021 - impact on the real estate market

Neukölln has been exercising the right of first refusal for the first time since November 2021 - impact on the real estate market

According to a report from www.berliner-zeitung.de, the Neukölln district has exercised its right of first refusal for the first time since November 2021. The district office announced that a building at Weichselstrasse 52 with 21 apartments and two commercial units would be transferred to the state-owned housing association Stadt und Land. Neither the seller nor the buyer lodged an objection to the decision, making the exercise of the right of first refusal legally binding. Until November 2021, it was common practice to use the right of first refusal in social protection areas in order to preferentially transfer houses to municipal companies and to protect tenants from excessive rent increases. However, the Federal Administrative Court ruled that the right of first refusal can only be applied to properties with severe structural defects or predominantly empty buildings.

Impact on the real estate market

The exercise of the right of first refusal by the Neukölln district office shows that the public authorities are still involved in the development of the real estate market and are trying to secure affordable housing. However, the decision of the Federal Administrative Court has led to a restriction of the right of first refusal, so that it can only be used in cases of structural defects or vacancies. This may lead to potential investors being more cautious when taking over properties in social protection areas, as there is the possibility of a right of first refusal by the public sector in the event of a need for renovation or vacancy. This could also lead to a shift of investment to areas without social protection areas, which in turn has an impact on supply and demand in these areas. It is also possible that increased public involvement will lead to greater control and regulation of the property market in certain areas, which could have an impact on prices and rents.

Overall, the exercise of the right of first refusal in Neukölln shows that real estate policy and regulation have a significant impact on the market and that investors and stakeholders should closely monitor these developments. The reform of the right of first refusal at the federal level, as noted by district councilor Jochen Biedermann, could bring further changes in the industry.