Germans Reject Expropriation as Vonovia Fights for a Market Floor

Forsa poll: 73% of Germans reject expropriating large landlords. Vonovia shares hit a 52-week low as Berlin's housing debate weighs on the stock.

Nearly three in four Germans have no appetite for seizing large residential portfolios from private landlords. A Forsa survey conducted for Stern and RTL found that 73 percent of respondents consider expropriation an ineffective tool for tackling steep rents in major cities, while just 24 percent back the idea and 3 percent remain undecided.

The resistance runs deepest in center-right and right-wing camps, where voters of the CDU and AfD overwhelmingly oppose any encroachment on private property. That puts the Berlin Left's push to transfer large housing stocks into public ownership on a collision course with broad political opposition.

Economists Favor Building Over Buying Out

Sentiment among economists is tilting the same way. As reported by the Frankfurter Allgemeine Zeitung, a study by the Kiel Institute for the World Economy gives clear priority to new construction. Rather than reshuffling ownership of existing buildings, the researchers argue, expanding the housing supply would meaningfully cool asking rents and relieve the market more durably than a pure change of hands.

The political initiative thus stands at odds with economic advice. Berlin's 2021 referendum on the matter did clear a majority at the ballot box, but shifting interest rates and tight public budgets have since squeezed the state's financial room for maneuver dramatically.

A Valuation Under Pressure

For the listed landlords, the persistent debate remains a tangible burden. According to Bloomberg, shares of Vonovia and Grand City Properties each posted losses of roughly 20 percent over the course of the quarter. Analysts caution that risks for German residential real estate names persist, with regulation and the interest rate environment both weighing on balance sheets.

Away from the national argument, the company is leaning on hands-on partnerships at its local sites. Together with the Social Service of Catholic Women, Vonovia launched a campaign against domestic violence in Koblenz, pairing information offerings in its residential buildings with targeted help in placing affected people into homes.

Operational Targets Hold Despite the Noise

Management is sticking to its full-year guidance, projecting rental income of between EUR 3.45 billion and EUR 3.55 billion. That figure underscores the earnings power of the letting business, which forms the backbone of the entire operation. Revenue flows from a broad housing portfolio that continues to see strong demand, particularly in densely populated metropolitan areas, and the company is counting on disciplined management of its holdings to preserve operating strength even as financing and construction costs shift.

Occupancy figures tell a similar story: a near-fully let portfolio keeps cash flowing steadily and gives the group room to maneuver across its properties. At the same time, the company is expanding capacity. CEO Luka Mucic, in comments reported by Handelsblatt, dismissed socialization as a remedy for housing markets and pointed to roughly 1,000 units currently under construction, alongside 6,000 apartments built in Berlin since 2013.

Looking to open additional lines of business, Vonovia has signaled its willingness to build and operate housing for soldiers as part of the planned expansion of the Bundeswehr. Together with its subsidiary Deutsche Wohnen, the group holds an extensive residential portfolio in the German capital.

Politics Cuts Both Ways

Berlin's housing debate drew fresh attention after the city's elections, in which the Left emerged as the strongest force. On the other side of the ledger, Chancellor Friedrich Merz announced legislation against expropriations, aiming to safeguard private investment and give companies planning certainty.

Investor caution is visible in recent ratings actions. Goldman Sachs downgraded the stock a good three weeks ago, and the shares have shed 8.9 percent since. For shareholders, the picture remains layered: the operating rental business delivers predictable returns, yet the interplay of political debate and muted market sentiment is sapping confidence among market participants.

A Floor in Sight?

In the capital markets, Vonovia's stock is struggling for stability after its latest pullback. The shares gained 2.0 percent to EUR 17.45 in today's session, having earlier touched a new 52-week low of EUR 16.98. The current price of EUR 17.04 reflects the ongoing pressure, and the stock is down 31 percent since the start of the year. The title remains in a wait-and-see posture as the market looks for clear signals of a sustainable re-rating.