Berlin: Less poor but still super sexy

The reality in Berlin is much better than politics want it to be. The rent burden is moderate, the net income per household and the ownership rate are rising.

by Peter Guthmann Published on:

About the Microcensus

The microcensus is a spot survey of 1 percent of the population. Every year, the microcensus compiles a basic analysis of the population and household structure, labour force participation, income and migration background. Furthermore, data on changing topics are collected every four years. In 2018, the housing situation in Berlin was examined. The results of the microcensus, which were presented at a conference on 11 November 2019, throw a new light on the current housing situation in Berlin.

Rent burden at 28.2 percent

The media recently reported an average rent burden rate of 46 percent in Berlin. According to the spot survey conducted by the Office of Statistics, the picture is much more differentiated. The rent burden rate is understood to be the amount of gross cold rent as a percentage of net household income. This is subject to the following restrictions:

  • Since 2016, a new micro centime sample has been used. 
  • Since income for statistical purposes is only collected in categories, the middle of the class is used as an auxiliary value for calculation.

As a result, a direct comparison of the 2018 results with earlier years is only possible to a limited extent. However, the explosive effect is not to be found in the development compared with previous years, but in the emerging status quo.

Based on this, the Office of Statistics calculates an average rent burden rate of 28.2 percent for Berlin for 2018, whereby the rate varies depending on the type of household and income category. Classified by household type, unemployed households in Berlin spend the highest share of income at 42.1 per cent. Senior households spend 30.5 per cent, households with children 31.9 per cent on average.

Rapid increase in net household income

The microcensus figures show that since 2002 net household income in Berlin has been rising continuously, with an acceleration in development since 2014. The increase in net household income from 2014 to 2018 is 21 percent, while gross rents for cold rent rose by 17 percent in the same period. The rent burden thus fell by 0.8 percentage in the period from 2014 to 2018. Comparisons between 2018 and previous years are also subject to a change of sample and categorisation of income.

Do Berliners make themselves poor?

Over a long period of time, net household incomes in Berlin have risen considerably. In terms of urban space, income in 2018 is 40 percent higher than in 2002. The biggest winner in this period is the Pankow district, where net household income has grown by 75 percent. In Friedrichshain-Kreuzberg the figure is 61 percent. All in all, 2018 is a balanced year for the districts. Districts with previously low-income households have caught up.

Net household income Berlin

 2002 2006 2010 2014 2018 2002-2018 %
Berlin 1.500 1.475 1.575 1.750 2.100 40%
Mitte 1.375 1.400 1.475 1.600 1.950 42%
Friedrichshain-Kreuzberg 1.275 1.175 1.400 1.675 2.050 61%
Pankow 1.375 1.475 1.600 1.850 2.400 75%
Charlottenburg-Wilmersdorf 1.575 1.600 1.675 1.800 2.200 40%
Spandau 1.525 1.525 1.575 1.600 1.975 30%
Steglitz-Zehlendorf 1.975 1.850 1.925 2.100 2.350 19%
Tempelhof-Schöneberg 1.525 1.575 1.675 1.925 2.100 38%
Neukölln 1.375 1.300 1.425 1.550 1.825 33%
Treptow-Köpenick 1.675 1.550 1.650 1.825 2.200 31%
Marzahn-Hellersdorf 1.650 1.500 1.525 1.700 2.100 27%
Lichtenberg 1.475 1.425 1.550 1.600 1.925 31%
Reinickendorf 1.725 1.675 1.675 1.850 2.100 22%

Increasing ownership rate in Berlin

The owner occupier ratio in Berlin rises to a peak of 17.4 percent. The ratio refers to condominiums used by owners themselves and does not correspond to the ownership ratio, which also includes property leased to third parties. Although Berlin is still at the bottom of the national league with 17.4 percent, the increase is still remarkable. The results of the microcensus raise a number of questions about home ownership. 

  • The tight rental housing market in combination with rising rents leads to alternative movements into the purchasing market.
  • The regulation of the housing market promotes the shift to home ownership
  • Rising household net income and low yields make property affordable
  • The internationalization of Berlin leads to a break-up of the dogma of the tenant city
  • The desire for home ownership is growing

The positive effects of the rising owner occupier ratio are accelerating the shortage effect on the rental housing market by turning landlords into sellers under the pressure of growing restrictions; rented flats are not transferred to a new letting but rather sold.

Average rent, apartment size and ancillary costs

In 16 years, from 2002 to 2018, net rents in Berlin have risen by EUR 2.91/m² or 66.1 percent. At the time of the census in 2018, the average warm rent in Berlin was 646 euros. Net cold, the average existing rent is 483 euros, with an apartment size of 67.8m² for rental apartments. The total ancillary costs, statistically and in relation to the above-mentioned apartment size, amount to 179 euros per month. The Berlin-Brandenburg Statistical Office calculated a rent per square metre of 7.30 euros on the basis of the sample survey results. Statistically, rents would thus be slightly above the rent index level of 2019. Existing rents are highest in the inner city and southwest of Berlin. Calculated by year of construction, there is a jump starting in 2001. The square metre rent in this class is 11.84 EUR/m². The cheapest rents are still to be found in the construction year class 1979-1990. The classic old building lies with about 7.80 EUR/m² only a little above post-war buildings.

Private property owners are slightly more expensive than municipal housing companies

Private individuals and companies take a slightly higher rent than housing associations and cooperatives. The median net cold rent for private individuals is 7.92 EUR/m², while housing associations and cooperatives take 6.57 EUR/m² on average.

Conclusion

Berlin has fewer problems than it believes and than the Berliners are made to believe. The results of the microzenzus on the rent burden rate, household income and the ratio of Berliners to their own four walls give a picture that is not to be explained by the usual political clichés of the poor city capital.

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