Yes it's nice for current tenants. Some times their rent is so low that they rather leave the apartment empty for a whole year and go vacation instead of giving up the contract. However, it's not so nice if you don't have an apartment to rent. Almost nobody wants to move out of their sweet deal. People (at least in Berlin) will stay in the contract even if they have bought a new home. They just sublease it to a friend at that lower rate plus some profit even.

I'm not free market absolutist but living in Berlin has shown me too much tenant protection can end up hurting actual home seekers.