It's only little over a month since Berlin became the first German city to introduce rent controls - and early signs suggest that the measures are working.

One of Germany's most popular real estate sites, ImmobilienScout24 reports that the average cost of new rental contracts dropped by 3.1 percent during the first month.

Before the new rules came in, rents were rising by almost half a percent on average per month. Rents remained static in other markets during June.

How does it work?

The bottomline is that landlords cannot increase rents by more than 10 percent more than the local average when renting to new tenants.

This average is based on data from a biennial state census of rents which are used to fix a standard median rent per square meter in each district of the city.

Rents can still rise, but not at exponential levels like those seen in Dublin during 2014 when at times annual increases ran at over 16 percent.

Differences

Like Dublin, Berlin has seen rapid increases in rents - but the two cities' experiences have been different.

As Germany's reputation as one of Europe's best cities to live in grew, people flocked to the city, pushing up rents - but renters in Germany enjoy greater protection than their Irish counterparts.

Prior to rent controls, existing renters already enjoyed similar protections, not allowing rent increases of more than 10 percent of the average for the area when rental agreements are renewed.

This means that the issue which is being addressed in Berlin is a discrepancy between the existing and new contracts, with new tenants being charged inflated prices.

In Ireland if you live in a private rented property your rent can be increased once per-year, but only by "the open market rate of rent" - which is tied to the sways of the property market.

Dublin rents have been spiralling - there are a lot of factors at play here, rents are up in the context of having crashed after the 2008 financial crisis. It has also created a lag in new properties coming on the market, creating a supply squeeze in the city.

The Central Bank's new mortgage regulations are also likely to have the effect of creating a greater long-term rental market.

When compared to other major European cities, Berlin's rents are still relatively cheap. Reiner Wild, managing director of the Berlin Tenants’ Association spoke to the Guardian, he said "We don’t want a situation like in London or Paris."

The problem for Dublin is that it already operates like a mini-London or Paris, with a highly-volatile market which has underdeveloped tenant rights.

The downsides...

There is an old adage that every problem has an obvious solution - the only problem is that that solution is normally wrong.

Swedish left-wing economist Assar Linbeck once said: "Next to bombing, rent control seems in many cases to be the most efficient technique so far known for destroying a city."

In economic circles rent control is a dirty word - neither of our Government parties have endorsed the idea, Ireland has favoured rent supplements and supply-side solutions.

On a basic level, rent control has been shown to decrease investment in property maintenance because, it is argued that landlords have less of an incentive to invest in improving and maintaining their properties.

Studies in the US have found that 29 percent of houses fall into disrepair in rent-controlled housing markets, compared to 8 percent in uncontrolled markets.

Ireland's Private Residential Tenancy Board (PRTB) completed a report on the matter, it found that rent controls could make things worse in Dublin.

'The Rent Stability in the Private Rented Sector' report was commissioned by former minister Jan O’Sullivan, it reviewed 11 rent control models and suggested that the policy would have unintended negative consequences, and not actually help Irish tenants.

It found that there would not be enough incentives for landlords to rent properties if rent control distorted the market.

Expect the idea to be shopped around during the lead-up to the General Election - but don't expect rent controls to happen in Ireland anytime soon.

The Right Hook will be taking a closer look at the Berlin-experience during today's show, which is live on air and online from 4:30 this afternoon.