The housing market report 2015 by the Investitionsbank Berlin (IBB) was presented in mid March. The headline: after years of rising prices, condominium prices are showing the first signs of consolidation.
Peak at mid year, slight decline by year end
According to IBB, the average listing price for a condominium in Berlin reached EUR 3,663 per sqm at mid 2015. By the end of the year it stood at EUR 3,426. That marks the first noticeable cooling after the dynamic price growth of previous years.
The picture is different for new developments. Average prices there were EUR 4,343 per sqm. High demand for modern apartments in Berlin and limited construction capacity are keeping new build prices stable.
Upper price segment dominates
The IBB report confirms a growing polarization. In 2015, 64 percent of all listings were priced above EUR 3,000 per sqm. This applies primarily to the inner city boroughs. In Mitte, affordable listings have become rare.
Large differences between boroughs
Consolidation is not happening uniformly. While prices in the city center are stagnating, per sqm prices in Spandau or Marzahn-Hellersdorf remain well below the Berlin average. For investors willing to look beyond the established prime locations, long term opportunities may emerge there. According to market data, overall demand pressure is likely to reach those locations as well.
The current cooling across the market provides a good opportunity to examine these price differentials more closely.
