In Australia, it’s a reality that some people are spending up to 50% of their salary on rent.
For Australia’s more than 2.6 million renters, despite some small falls in the overall property prices in the past year, rents have continued to climb in the first half of 2019.
To fight a similar situation in Germany, Berlin City Council has as of late hit upon a slick plan to attempt to stem the rising tide of gentrification that has seen the cost of leases in the German capital twofold in the previous decade. It has now ratified a plan to lock the price of leases in Berlin for the following five years from January 2020 (with a review provision planned to prevent any sharp property proprietors from lifting the costs in the meantime).
In a city where 85 percent of the population rent rather than own their own home — and more than 40,000 people have moved to the city from elsewhere in the past decade — many experts say Berlin is in the midst of an affordability housing crisis In 2017 a staggering 20.5 percent average rent increase in Berlin was reported to be the biggest year-on-year rent increase anywhere in the world.
Local Berliners all of a sudden felt like foreigners in their very own city – greatly out numbered by vacationers and many were being pushed out of their own homes by landowners wanting to run Airbnb and short stay businesses which ended up lifting the property prices. So, the prominence of the city brought about a fast populace development and the city was not able stay ahead of the demand.
But over the past few years Berliners have begun revolting — staging affordable housing demonstrations all over the city brandishing signs with slogans like ‘Homes for people not property for profit’, including a large one last April in Alexanderplatz.
Now the Berlin City Council has listened by taking the relatively radical step of rent freezing. But not everyone is estatic.
But numerous Berliners would like to keep remote financial specialists out than have their city lose its progressively grungy, diletantish, network situated edge. Late in 2018, Berliners figured out how to fend off endeavors by Google to set up a Campus worth €500 million (A$804 million) in the city’s dynamic heart of Kreutzberg after it was fought by local activists.
Like major Australian cities and many other international cosmopolitan destinations, Berlin wants to avoid the fate of becoming a city where international super-rich investors simply park their money in cheap property (apartments in Berlin are still about a third of the price of those in London or Paris) and watch their investments grow while ordinary residents are priced out of the market.
In Australia, parts of our cities like Docklands in Melbourne are becoming what has been dubbed ‘global capital reserve shelters’ — dominated by medium-density ‘off-the-plan’ investment property strips.
That’s why Berlin’s rental price freeze would be a great step that I can only wish Australian political leaders would have the bravery and foresight to emulate — rather than simply allowing the market to dictate housing prices, leaving many people forced out of the urban housing market or permanently living in housing stress.