Authors
Publication Date
JEL Classification
L85
R31
Key Words
The new German federal government has stipulated a price cap as a response to the seeming “rent explosion” in German residential markets. Contrary to this perception, we find that inflation-adjusted rents net of heating are even lower today than twenty years ago. Furthermore, our regionally disaggregated data on ask prices for flats reveal that rapidly increasing rents can only be observed in a few districts. We have calculated that residents of such districts could escape rising rents by changing residence and accepting an average additional commute of about half an hour each way.
