BERLIN, Nov 16 Reuters On Berlin39;s broad avenues, posters put up by desperate wouldbe tenants seeking accommodation have become a common sight. Home viewings draw long lines of hopefuls, despite rent rises that have far outstripped salaries in recent years.

The German capital, where cheap and abundant apartments were a magnet for artists and young professionals as recently as a decade ago, now has a vacancy rate of less than 1. The cost and difficulty of renting is making it hard to attract talent and forcing some residents to leave, even though businesses are desperate for skilled labour.

And while the local government says Berlin has sufficient space to build over 100,000 apartments, there is no sign the housing crisis gripping the city will ease.

Rolf Buch, chief executive of Vonovia, Europe39;s largest landlord, cited factors including recordhigh interest rates and rent controls to explain the chronic mismatch between housing supply and demand.

New construction hardly makes sense for many projects these days, because with 5,000 euros per square metre and 4 interest, someone has to finance it, he told Reuters.

When I go to the bank, they tell me, Mr. Buch, come back when you39;ve done the calculations again, because you can39;t even earn interest on the rent.

The surge in borrowing costs has already tipped some German property developers into insolvency. It is also keeping potential home buyers in the rental market, despite a recent easing in house prices…