On 18th of November 2014, the UIPI has held its annual Property Day to discuss the Effectiveness of Private Rental Markets in the light of recent EU and national developments.
The purpose of this year’s event was to take stock of European level developments in relation to private rental markets within the framework of the European Economic Governance and to debate together with European Commission and key stakeholders from the real estate and construction sectors the recent national rental law reforms and rent control trends as well as their potential impact on economic growth.
The key-note speaker was Peter Pontuch, from the European Commission, DG Economic and Financial Affairs who presented an Economic Paper assessing the impact of member states’ private rental sector regulation on house price dynamics. The study concludes that rent control measures tend to have an adverse effect on housing market dynamics, increasing the volatility of house prices when facing shocks to the fundamentals (such as shifts in population, household income, residential investment and interest rates).
The discussion then focused on recent changes that could jeopardise the positive reform of the rental market in Portugal, the ongoing move toward rent control in France and in Germany as well as their latent repercussions on the aggregate national housing markets, the overall real estate sector and the construction industry.