Market Analysis
Berlin construction costs
Construction costs in Berlin rise 2.2 percent in February 2016 with finishing trades leading the way
Building in Berlin is getting more expensive. According to the statistics office, construction prices rose 2.2% year on year in February 2016. Painting costs jumped 7.3%, while shell construction remained relatively stable.
Peter Guthmann
The Statistical Office of Berlin-Brandenburg reports a 2.2 percent year on year increase in new build residential construction prices for February 2016. In November 2015, the rate was still 1.8 percent. Prices also rose 0.8 percent compared to November. Cost pressure is building.
Finishing trades are driving prices
Finishing works rose by an average of 2.6 percent. Painting and coating led with a 7.3 percent increase, followed by roller shutter work (+5.4%), carpentry (+4.7%), and heating and central hot water systems (+3.9%).
Shell construction costs rose more moderately: masonry by 1.6 percent, concrete work by 0.5 percent. Screed work actually fell by 2.7 percent and steel construction by 0.3 percent.
Impact on investors and owners
Anyone planning to build new apartments in Berlin needs to budget for higher production costs. These will feed through into sale prices for new developments. At the same time, existing properties become more attractive as the price gap to new builds widens.
Renovations and modernizations are also getting more expensive. The increase in finishing trade costs affects owners directly, whether for facade work or new heating systems.
Context
Rising construction costs are a consequence of high building demand in Berlin. Ongoing population growth keeps construction firms' order books full, especially in sought after locations like Mitte. Capacity is tight, and that pushes prices up. For the overall market development, this means the pressure on Berlin's housing market is not easing any time soon.