Removing residential units from the long-term lease market and turning them into overnight units does not increase supply, it actually reduces the number of units available for lease.
This raises the equilibrium for lease units: less units available, higher prices. Not to mention the fact that leasers are now competing against people paying higher nightly rates.
Yes, but removal of units from the long-term lease market is not a reason for the problem; it is the consequence of imbalance caused by regulation (of zoning and now also rent control in Berlin).
Berlin overall is an anomaly in Germany; during the Cold War division of Germany to BRD and DDR, living in Berlin was heavily subsidized, and that still shows up in the planning, the structures and the market. But the impact of a 40-year "siege" is going away now 25 years after it ended, and at the same time the capital has moved to Berlin, along with lots of administration and related jobs and businesses.
This raises the equilibrium for lease units: less units available, higher prices. Not to mention the fact that leasers are now competing against people paying higher nightly rates.