[em-bee]

because prices aren't lowered until there is pressure to do so. and that won't happen until enough properties remain empty that it starts to cost money. as far as i can tell, the preference currently is to leave properties empty instead of renting them out at low prices, so all creating more supply will do is to create more empty properties, unless landlords are literally forced to rent them out at lower prices.

[unmole]

> as far as i can tell, the preference currently is to leave properties empty instead of renting them out at low prices

In Narnia? Go look at the actual vacancy rate.

[anonuser123456]

It’s weird that people think cashflow on leveraged investments isn’t important.

[em-bee]

part of the "problem" is that rent contracts are unlimited, so if rents are to low, then it may make sense to wait until they rise before renting out, especially in sight of a law that doesn't allow any raises for the time being. but as the article points out, many instead opted to sell outright.

[looping__lui]

So, to your point, this law of capping rents would then incentivize landlords to keep rental units vacant? Wow, sounds like exactly the kind of effect one can expect from laws suggested by Red-Red-Green in Berlin that lack any common sense or basic understanding of markets.

[em-bee]

the very article you posted earlier shows that when the price controls were applied, a significant amount of rental properties were instead offered for sale. my interpretation is that these sellers didn't think that renting out at those prices was worth it, or soon wouldn't be.

i highly doubt that these people, when confronted with a more competitive market would choose to lower rent to compete instead of again just sell.

so i highly doubt that more rental units will automatically lead to lower rents.

[looping__lui]

“ so i highly doubt that more rental units will automatically lead to lower rents.”

They will IF landlords can expect positive returns on their investments given a certain price level. You can dig into the public filings of companies like LEG, Vonovia and TAG who publish the average rental prices and the occupancy. In cities with supply exceeding demand, rents are lower (e.g., high vacancy rates). Example: https://irpages2.eqs.com/download/companies/legimmobilien/Qu..., page 5.

There is of course also a big callout with respect to “correlation does not imply causation”, e.g., it is very likely that there is a hidden confounder (economic prosperity) that drives down vacancy rates and drives up rents which ties back to my earlier argument that capping rents doesn’t make sense if the cities, politicians and bureaucrats fail miserably at their jobs.

Maybe get a business degree or learn something about it. Your statements make me cringe very much the same way an MBA explaining LLMs to you may make you very miserable.

[looping__lui]

Your statements are total nonsense. What you state is factually incorrect.

Go read the public filings from the big real estate companies in Germany - Vonovia, LEG and TAG: https://irpages2.eqs.com/download/companies/legimmobilien/An...

https://report.vonovia.de/2022/q4/app/uploads/Vonovia-SE_Ges...

https://www.tag-ag.com/fileadmin/content/geschaeftsberichte/...

There is no single company that dominates a city or market enough to “profit from keeping rental units vacant at scale”. Vacancy rates and driving them down is a massive talking point in investor calls. High vacancy is bad because investors mainly care about rental income. The aforementioned companies achieve 3% or so organic rent growth - which is LOWER than inflation.

You have very little understanding of how the business world works and I’d recommend to take a couple of courses or classes in that field. It’s the same suggestion you would give an MBA type posting his opinion about programming or ML on Hacker News I suppose.

There are strategic investors though that buy run down buildings without any intention of renting them out ever but holding them for speculation. This is wrong and harms society. Land zoned for urbanisation is a right that is granted by society and has implicit value only from society granting these rights. Speculations on these artificially (by said society) limited building permissions needs to be eliminated. The space does not have much “inherent value” in itself (e.g., assuming no building for the ease of argument) - but only gains value by being artificially limited in quantity by society.