Germany is, unlike the US or UK a nation of renters, where even wealthy people often don´t own their house. ( in some regions, like the capital Berlin or the northern port city Hamburg between 80-90 % of all accomodation is rented and even in prosperous Bavaria homeownership doesn´t exceed 50 %, countrywide it is between 30-40 %, the lowest in the European Union) . The reasons for that go back to the post-WW II rebuilding period, but are also the result of conscious policies. Banks are (also for cultural reasons) usually risk averse and impose stringent capital requirements before offering a mortgage ( not less than 20 % and sometimes up to 40/50 % in cash and a stable income), which has kept people on lower wages and unreliable jobs largely out of the housing market (thus also no crash in 2008/009), tenants enjoy plenty of legal protections (changing tenants for the purpose of rent hikes is f.e. unattractive for property owners since price hikes for new leases are capped and need to be based on actual investment), and rent contracts usually infinite ( that means real estate speculation offers only „modest“ profit margins compared to the UK f.e.), and the state offers financial incentives to developers and investors to create social housing projects.
Yet now, in times of low interests, economic prosperity, (more or less) full employment, high immigration and plenty of money regarding Germany as a „safe haven“ pouring into the country also the german housing market, especially in the huge cities, has shown signs of heating up. Which the governement seeks to combat among other things by introducing a „rent cap“, now first beeing tested in the capital Berlin. New leases will only be allowed to be 10 % or more above the local average if the property in question has just been built or just been completely renovated. Price hikes in existing contracts are capped anyway. At 20 % maximum over three years and also then only conditionally (renovation, investment by the owner of the property). Berlin and federal politicians goal ( since the rent cap is supposed to arrive in other regions as well) is to avoid gentrification and „London conditions“ (justice and consumer protection minister Heiko Maas), where vast parts parts of the inner city become un-inhabitable for normal wage earners and families for accomodation cost reasons :



http://www.theguardian.com/world/201...berlin-germany