Berlin rents in January 2016: Net rent up 1.6%, utility costs down 4%

Net cold rents in Berlin rose by 1.6 percent year on year in January 2016. That is according to inflation data published by the Berlin-Brandenburg Office of Statistics. In December, the increase had been 1.5 percent. The upward trend continues.

Falling utility costs cushion the increase

For tenants, the rise is softened by a countermove in utility costs. These fell by four percent in January, after a 1.7 percent drop in December. The bottom line: gross warm rents rose by just 0.9 percent (December: 1.1 percent). The total burden grew more slowly than the actual cold rent.

The main reason is a sharp drop in energy prices. Heating oil became 28.8 percent cheaper than the previous year. District heating fell 9.1 percent, gas 0.8 percent. Residents in buildings with oil heating felt the relief most.

1.6 percent cold-rent growth lifts the running yield

Net cold rent is the raw yield of a rented property, and the 1.6 percent year-on-year increase improves the running return for owners and investors in Berlin apartments. At the same time, the four percent drop in utility costs reduces the overall burden for tenants, which keeps letting prospects strong. Anyone offering an apartment can currently count on solid demand.

Differences between boroughs

The statistics reflect a city wide average. In popular inner city locations like Mitte or Prenzlauer Berg, net cold rent increases likely exceeded the average, while outer boroughs tend to lag behind. The decline in utility costs, on the other hand, is a Berlin wide phenomenon. Those looking to track the market development in individual boroughs can find current data on our borough dashboards.