Cold rent up, warm rent barely changed
Net cold rents in Berlin rose 0.6 percent year on year in May 2016, according to the Berlin-Brandenburg statistical office. That was above the city's general inflation rate of 0.3 percent. Yet tenants hardly felt the increase. The reason: ancillary costs fell 4.0 percent over the same period, mainly due to lower energy prices.
The bottom line: gross warm rent rose just 0.1 percent. Housing costs sat below general inflation, meaning the real burden on tenants actually decreased slightly.
Turning point for ancillary costs?
One detail deserves attention. Compared with April, ancillary costs showed no further decline. The downward trend that had lasted over a year appeared to have stalled. At the same time, net cold rents rose 0.2 percent in a single month, from April to May.
For owners and investors, this mattered. If ancillary costs were to stagnate or rise again, future cold rent increases would feed through directly to the warm rent. That affects the calculation of advance utility payments as well as the assessment of future rental income.
What the figures meant for landlords
The moderate rise in cold rents supported property values, even though the rent brake limited the pace. Demand remained high in sought-after locations such as Mitte and Neukoelln. The market data showed: landlords who tracked both components, cold rent and ancillary costs, were better placed to gauge actual yields.
