Construction prices in Berlin 2014: new-build costs rise by 2 percent

Construction prices in Berlin continued to rise in 2014. According to the Office for Statistics Berlin-Brandenburg, the price index for new residential construction increased by 2.1 percent in November 2014 compared with the same month the previous year. The annual average increase stood at 2.0 percent.

Shell construction versus finishing work

The overall rise was made up of differing trends. Shell construction costs increased by 1.8 percent, while finishing work rose by 2.2 percent. Finishing trades such as painters, electricians and plumbers were in particularly high demand in 2014 because modernisation of existing properties was also picking up alongside new construction. Shell construction firms were partly able to absorb cost pressure through more efficient processes and larger company structures.

Waterproofing and scaffolding as cost drivers

Within shell construction, two trades stood out: waterproofing work at plus 4.8 percent and scaffolding at plus 3.2 percent. Tighter requirements for moisture protection and energy efficiency made waterproofing more labour-intensive and expensive. Scaffolding costs reflected the high capacity utilisation across the industry.

What this meant for developers

At typical construction costs of 2,000 euros per square metre, a 2 percent increase translated to additional costs of 40 euros per square metre. For a 100 square metre apartment, that added up to 4,000 euros in extra costs. Anyone planning in 2014 but building in 2015 or 2016 had to factor in further increases.

Long-term context

After years of moderate rises, construction cost inflation in Berlin accelerated in 2014. The city was catching up with construction cost levels in major western German cities. For owners of existing properties, this had a stabilising effect on values: higher new-build costs supported prices for existing apartments in Berlin. Construction price inflation became a structural factor in Berlin's market development.